American chief executive, President Donald Trump, re-ignited his commercial feud with the European Union (EU) on Friday. Trump declared his intention to impose a drastic 50% tariff on European goods, citing deteriorating negotiations with Brussels as the key reason. Meanwhile, the President also aimed criticism at smartphone manufacturers, including American technology behemoth Apple. He warned of imposing an additional 25% tariff on these companies should they fail to shift their manufacturing base to American soil.
Global markets reacted negatively to these bellicose remarks, sparking new concerns about possible disruptions to the global economic stability. Interestingly, President Trump had recently brokered agreements with China and Britain that had momentarily eased global economic tensions. Trump first voiced his tariff threats against the European Union via a morning post.
According to the president, the negotiations with the EU seemed to have reached a stalemate. He aired his intentions about implementing the hefty tariff of 50% on the EU starting from June 1, 2025. Trump later affirmed his position during an interaction with press correspondents at the Oval Office, emphasising that there was no scope for the 27-country bloc to alter his stance.
Trump reiterated his firmness on the proposal, stating he was not seeking for any negotiations. He said unequivocally that he had frozen the terms of the trade norms at a 50% tariff rate. He expressed his dissatisfaction with the European Union, claiming that the bloc had not returned the United States’ fair treatment and had collectively exploited the US economy.
The 78-year-old billionaire and property developer, President Trump, dismissed worries that his proposed tariffs might impose a financial burden on American enterprises. He insisted that his policy decision would, in fact, stimulate the American economy, rather than hurt it.
However, should these tariffs come into effect, they would substantially elevate Washington’s prevailing base tariff of 10%. This would invariably exacerbate the already tense relationship between the largest global economy and its most extensive trading partner. Leaders from the European Union were quick to express their disapproval and dismay towards the US president’s announcement.
Ireland’s Prime Minister, Micheal Martin, conveyed his distress over Trump’s declaration, deeming it ‘substantially unviable,’ and went on to write that ‘tariffs inflict damage on all involved parties.’ Echoing similar sentiments, France’s trade minister, Laurent Saint-Martin, stated that while France is ready to pursue de-escalation, it is also prepared to initiate defensive trade measures, as required.
An official representative of the EU refrained from commenting immediately after Trump’s announcement, indicating an upcoming call scheduled later in the day between Maros Sefcovic, the EU Trade Commissioner, and the US Trade Representative.
In tandem with the tariff announcement, Trump also lambasted the CEO of Apple, Tim Cook, for his failure to shift the iPhone’s production base to the United States, despite repeated requests. Trump articulated his expectations of iPhones sold in the United States to be manufactured on American soil, and not in India or any other foreign land.
Trump was resolute with his warning, specifying that if his requirement was not met, Apple would need to bear an additional tariff of at least 25%. He then elevated his warning, applying it uniformly on all smartphones not manufactured in the United States. It was necessary to include Samsung and any other smartphone producer for the tariff to be equitable, Trump commented, pegging the deadline for the tariff implementation to the ‘end of June.’
On April 2, which President Trump referred to as ‘Liberation Day,’ he imposed comprehensive tariffs on most of the globe, setting a basic 10% duty alongside higher levies, inclusive of a 20% tariff on the EU. While this initially sent stock markets into chaos, they eventually stabilized after President Trump postponed the larger tariffs for 90 days.
Following that, Trump claimed early victories based on agreements struck with Britain and China, the world’s second largest economy. Converse to these developments, discussions with the European Union have been largely unproductive, with the EU recently threatening to hit nearly €100 billion ($190 billion) worth of US goods with new tariffs unless the US agrees to reduce the tax on European goods.
Scott Bessent, United States Treasury Secretary, in an interview with Bloomberg Television on Friday, stated that the continued application of the lower 10% tariff was contingent on countries or trading blocs ‘negotiating in good faith.’
Global traders reacted with unease to Trump’s latest attack on Europe. Main indices on Wall Street fell around 1% in the first two hours of trading, while the technology-focused Nasdaq index initially dropped by 1.5% before making a slight recovery. Apple’s shares also took a hit, dropping by 2.5%.
In Europe, Paris and Frankfurt closed with approximate losses of 1.5%, while London’s FTSE 100, which initially showed gains, also ended the day with losses. This global financial tumult showcases the delicate balance of international economic relations and the impact of even a single policy decision.