Stock markets had been down in early trading on Friday after President Donald Trump acknowledged he essential to impose a 50-p.c tariff on the European Union and a brand new 25-p.c tariff on iPhone maker Apple.
The S&P 500 was down round 0.8 p.c, the Nasdaq Composite down 1.0 p.c, and the Dow Jones Industrial Moderate by 0.6 p.c as of 10:40 ET. Apple stock, meanwhile, had fallen 2.3 p.c.
This came following a Truth Social post from Trump in which he launched plans to counsel a 50-p.c tariff on the bloc initiating June 1. Minutes earlier, the president expressed frustration with Apple CEO Tim Cook, writing that he expects iPhones sold in the U.S. to be “built in the US, no longer India, or anyplace else.”
A spokesperson for the European Rate urged Newsweek it will probably perhaps no longer comment except after a call in a while Friday between the EU trade chief, Maroš Šefčovič, and U.S. Change Representative Jamieson Greer.
Newsweek reached out to Apple and the White House for comment by potential of e mail.
Timothy A. Clary/AFP by potential of Getty Photography
Why It Matters
Concerns over the potentially damaging impacts of Trump’s tariffs on the U.S. and world economies had been allayed in contemporary weeks by his reciprocal tariff stop on April 9, sure rhetoric from the administration on doable trade deals, and the Would possibly well per chance 12 announcement that the U.S. and China would temporarily in the reduction of the staggering tariff rates applied to every other’s imports.
Nonetheless, Trump’s most up-to-date announcement marks an escalation in the dispute with the EU, indubitably one of The US’s perfect trading partners, which Trump had beforehand accused of being designed to “screw” the U.S. Total items trade between the pair reached trusty under $1 trillion in 2024, in step with the U.S. Change Representative’s Keep of job.
What To Know
Sooner than markets opened, Trump complained in his post to Truth Social that the EU had been “very complicated to tackle” and described the contemporary U.S. trade deficit with the union as “totally unacceptable.” The president acknowledged that the trade deficit had grown to “more than $250,000,000 a year,” elevated than the unswerving figure equipped by the Keep of job of the U.S. Change Representative for 2024, $235.6 billion.
“Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, initiating on June 1, 2025,” Trump wrote, together with that there’ll probably be no tariff for merchandise “built or manufactured in the US.”
Trump hit the EU with a 20-p.c “reciprocal” tariff all the intention in which by intention of his “Liberation Day” speech on April 2, nonetheless lowered this to the baseline rate of 10 p.c days later. The EU responded by pausing its like retaliatory tariffs on US items for 90 days, which European Rate President Ursula von der Leyen acknowledged would “give negotiations a gamble.”
In mid-Would possibly well per chance, EU diplomats urged Politico that the U.S. had made contact to uncover its willingness to enter negotiations, even though no concrete progress against a trade deal has been launched.
Every week prior, the European Rate had drafted a checklist of “doable countermeasures” which it acknowledged would impact €95 billion ($108 billion) price of U.S. items, and could perhaps be deployed “if ongoing EU-US negotiations attain no longer lead to a mutually helpful and the removal of the US tariffs.”
In his post on Friday, Trump cited trade boundaries and VAT taxes amongst his motivations for the new tariff, as smartly as what he acknowledged had been “unfair and unjustified court cases against American Corporations,” an apparent reference to the fines imposed by the EU on Meta and Apple final month for violations of its digital market solutions.
European stocks plunged following Trump’s announcement on Friday, nonetheless losses tempered against the pause of trading. The Euro Stoxx 50 closed down 1.9 p.c, while the Stoxx Europe 600 dropped 1 p.c.
Sooner than this, the president warned Apple CEO Tim Cook that if the company fails to create its iPhones in the U.S., this could be field to its like 25 p.c tariff.
“I really like manner abet told Tim Cook of Apple that I demand their iPhone’s that shall be sold in the US of The US will probably be manufactured and built in the US, no longer India, or anyplace else,” Trump wrote. “If that just isn’t any longer the case, a Tariff of on the least 25% need to be paid by Apple to the U.S. Thank your to your consideration to this topic!”
What Folk Are Asserting
President Donald Trump, Friday on Truth Social: “The European Union, which was formed for the main cause of taking profit of the US on TRADE, has been very complicated to tackle. Their extremely effective Change Barriers, Vat Taxes, ridiculous Company Penalties, Non-Monetary Change Barriers, Monetary Manipulations, unfair and unjustified court cases against Individuals Corporations, and more, like led to a Change Deficit with the U.S. of more than $250,000,000 a year, a bunch which is totally unacceptable.”
Economist and professor of worldwide trade at McMaster College, Pau Pujolàs urged Newsweek that a couple of of what Trump acknowledged pertaining to the EU’s trade boundaries was appropriate, nonetheless that his comments regarding the “totally unacceptable” trade deficit with the bloc had been “at once nonsense.”
“Having a trade deficit just isn’t any longer ‘totally unacceptable;’ it is correct a reality, as essential as me running a mammoth trade deficit with Costco every year is correct a reality—that deal improves my family’s economic wellbeing.”
He added that a 50-p.c tariff on EU items “could perhaps be a wicked thing mostly for the U.S. (and a little for the EU). U.S. importers and patrons will endure deal.”
Kevin O’Marah, chief analysis officer at provide chain consultancy Zero100, urged Newsweek that the 25-p.c tariff on Apple “will suggest elevated prices—doubtlessly ~$100 more per iPhone.”
“This could perhaps handiest dampen sales marginally since the iPhone is a will need to like merchandise. No person will quit their iPhone, nonetheless some will extend the enhance to new model.”
What Happens Next
Trump acknowledged he could perhaps be “recommending” the 50 p.c tariff on EU merchandise. The White House has no longer but confirmed whether this can clutch enact.
Change 05/23/25, 11:32 a.m. ET: This article was up so some distance with comment from Kevin O’Marah.
