In a move that sent shockwaves through global markets, President Donald Trump has once again taken an aggressive stance on international trade. On Friday, Trump threatened to impose a hefty 50% tariff on goods imported from the European Union starting June 1st, while also warning Apple that iPhones sold in the U.S. could soon face a 25% tariff—unless they’re made on American soil.
These fresh threats, shared via Trump’s social media platform, come at a time when markets were beginning to stabilize after a turbulent few months. The S&P 500 dropped 1% following the announcement, while the tech-heavy Nasdaq slipped 1.2%. European stocks weren’t spared either, with a 1.5% plunge across the board.
Trump’s renewed tariff threats are part of a larger effort to pressure trading partners—particularly the EU—into more favorable trade deals. According to the President, the EU has been stalling negotiations and taking advantage of the United States for far too long. “Our discussions with them are going nowhere,” Trump posted on Truth Social, emphasizing his frustration with the slow progress.
His remarks have reignited fears of a prolonged trade war, reminiscent of the one that rattled the global economy during his first term. This time, Apple is at the center of the storm. Trump has demanded the tech giant shift iPhone production to the U.S., even though currently no smartphones are manufactured domestically. The proposed 25% tariff would significantly raise the cost of iPhones, potentially making them hundreds of dollars more expensive for American consumers.
While Apple is already working to diversify its manufacturing operations, aiming to produce most of its U.S.-sold iPhones in India by 2026, there are no immediate plans to bring production to American factories. A $500 billion investment plan in nine U.S. states, announced earlier this year, notably excludes smartphone manufacturing.
Experts believe that imposing a company-specific tariff, like the one Trump is threatening against Apple, could face serious legal challenges. “There’s no clear legal authority for that,” said trade attorney Sally Stewart Liang, adding that such measures typically require lengthy investigations under anti-dumping laws.
On the EU front, European leaders are expected to respond cautiously. Trade chief Maros Sefcovic is scheduled for a call with his U.S. counterpart, while member states hold emergency discussions in Brussels. Dutch Prime Minister Dick Schoof has already signaled that the EU will treat Trump’s threat as just another chapter in ongoing negotiations.
With nearly $566 billion worth of goods exported from the EU to the U.S. in the last year—led by Germany, Ireland, and Italy—the impact of a 50% tariff could be severe. Items like German cars, Italian olive oil, and pharmaceuticals would likely see steep price hikes for American buyers.
Despite market panic, some remain optimistic. Volvo CEO Hakan Samuelsson said he’s hopeful an agreement will be reached soon. “It couldn’t possibly benefit either Europe or the U.S. to shut down trade,” he remarked.
But as history has shown, with Trump, nothing is off the table.
