Trump escalates trade war with threats of 50% EU tariffs and 25% Apple penalties

 

President Donald Trump on Friday warned that he could impose a 50% tax on all goods coming from the European Union and a 25% tax on Apple products unless iPhones are made in the U.S.

These warnings, shared on social media, show how Trump can shake up the global economy with just a few online posts. They also show that his past tariffs haven’t yet led to the trade deals or the return of U.S. manufacturing that he had promised.

The Republican president said he wants to place higher import taxes on goods from the EU, a traditional U.S. ally, than on goods from China. China’s tariffs were recently lowered to 30% so that trade talks between Washington and Beijing could continue. Trump is frustrated that trade talks with the EU haven’t made progress. While the EU suggested removing tariffs on both sides, Trump insists on keeping a 10% tax on most imports.

“Our discussions with them are going nowhere!” Trump wrote on Truth Social. “Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States.”

Before this, Trump had already threatened Apple with import taxes because the company plans to keep making iPhones in Asia. Apple now finds itself in the same position as Amazon, Walmart, and other major American companies trying to deal with the confusion and rising costs caused by Trump’s tariffs.

“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump posted. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”

Trump’s message is important because he’s saying that Apple, the company, should pay the tariff cost—different from his earlier claims that foreign countries would cover these fees. Usually, importers pay tariffs, and they often raise their prices so customers end up paying more.

After Trump’s tariffs on China, Apple CEO Tim Cook said most iPhones sold in the U.S. this fiscal quarter will come from India, while other products like iPads will come from Vietnam. Analysts at major banks said that if iPhones were made in the U.S., a $1,200 iPhone could cost between $1,500 and $3,500.

Stock markets dropped after Trump’s posts. The S&P 500 fell about 0.5% on Friday afternoon. Markets have become very sensitive to what the president says—dropping when he announces tariffs and rising when he backs off.

U.S. Treasury Secretary Scott Bessent tried to explain Trump’s statements during an interview on Fox News’s “America’s Newsroom.”

Bessent said the EU has trouble acting together because its 27 countries are represented by “this one group in Brussels,” and that individual countries often don’t know what’s being negotiated on their behalf.

Bessent wasn’t in a White House meeting with Tim Cook this week but said he had spoken with the Apple CEO. He said the administration wants Apple to bring more of its computer chip supply chain to the U.S.

Trump’s main argument against the EU is that the U.S. has an “unacceptable” trade deficit with the 27 EU countries. A trade deficit happens when a country buys more from others than it sells.

The EU’s executive commission says that if you count both goods and services, trade with the U.S. is fairly even. The U.S. makes more money selling services to Europe, which helps balance out the goods trade deficit. The remaining gap is 48 billion euros ($54 billion).

German Foreign Minister Johann Wadephul said his country supports the EU commission in trying to “preserve our access to the American market.”

“I think such tariffs help no one, but would just lead to economic development in both markets suffering,” Wadephul said in Berlin. “So we are still counting on negotiations, and support the European Commission in defending Europe and the European market while at the same time working on persuasion in America.”

Trump’s aides have said the purpose of his tariffs is to isolate China and reach new deals with U.S. allies. But Trump’s latest threats make that goal harder to believe. With the EU possibly facing steeper tariffs than China, experts like German economist Marcel Fratscher think the EU might have done better to work together with China and other countries against Trump’s trade tactics.

“The strategy of the EU Commission and Germany in the trade conflict with Trump is a total failure,” said Fratscher on X. “This was a failure you could see coming — Trump sees Europe’s wavering, hesitation and concessions as the weaknesses that they are.”

Mary Lovely, an expert at the Peterson Institute for International Economics, said the 50% tariffs are probably just a tactic to pressure the EU. She said Trump seems to think that making extreme threats will show he’s serious and push others to agree.

However, she said this approach makes it look like the U.S. is not a dependable trade partner and is driven more by sudden decisions than consistent rules.

Trump has had an up-and-down relationship with Apple, showing that pleasing him doesn’t always protect a company from being targeted. He told companies like Walmart to absorb tariff costs instead of raising prices, even though that could reduce profits or lead to job cuts. Now he’s using the same strategy to pressure Apple into moving production to the U.S.

Trump had once created an exception on electronics from China to help companies like Apple. But now he may take that back. He’s also threatened a separate 25% tax on computer chips and might change the tariff list in a way that hits Apple products harder.

Not long ago, Trump praised Apple’s plan to invest $500 billion in the U.S. as part of its work on artificial intelligence. But he recently criticized the company while speaking in Qatar.

“I had a little problem with Tim Cook yesterday,” Trump said. “I said to him, ‘My friend, I treated you very good. You’re coming here with $500 billion, but now I hear you’re building all over India. I don’t want you building in India.’”

Experts are unsure if Apple can quickly move its production to the U.S. The company has spent years building complicated supply chains in China. It now faces another challenge: dealing with what Ben Wood, a top analyst at U.K.-based CCS Insight, called “the unpredictable nature of the current U.S. administration.”

“At any moment, things can change overnight, making it extremely difficult for companies such as Apple to plan their business,” Wood said. “It seems that despite the best efforts of the Apple leadership team to lobby the U.S. administration to treat the iPhone more favorably, a curveball can come out of nowhere and derail any plans they have in place.”