US President Donald Trump warns of 50% tariff on all imports from the European Union

US President Donald Trump has once again fueled trade anxieties by announcing that he will impose a 50% tariff on European Union (EU) imports from June 1, 2025, and a 25% tariff on foreign-made smartphones. This decision follows the failure of Trump's government to strike a final deal with the EU, leading him to escalate his demands.

Trump's ultimatum to the EU

In a tweet on his social media site Truth, Trump blamed the EU for being established to exploit the United States in terms of trade. He complained about the speed of negotiations, attributing this to the EU's trade barriers, VAT taxes, and business fines as the major obstacles. Trump stated, "Our talks with them are going nowhere! Therefore, I am recommending a flat 50% Tariff on the European Union, effective June 1, 2025.
 

Produce in the US or pay tariffs

Trump also got at Apple, threatening to put a 25% tariff on iPhones sold in the US unless they are made in America and not in India or somewhere else. He mentioned he had told Apple CEO Tim Cook previously that he wishes iPhones sold in the US to be made in America and not India or anywhere else.

Market reaction and global implications

Tariff threat has created market instability, with big US indexes and European stocks down. The dollar weakened, and gold prices strengthened as investors look for safe-havens. The new tariffs could raise the prices consumers pay on several EU imports, from Italian olive oil to German automobiles.

EU's response and trade negotiations

The EU has offered mutual tariffs to zero, but Trump has been adamant about keeping a base 10% tariff on imports in general. EU Trade Chief Maros Sefcovic has reaffirmed commitment to finding a deal that benefits both sides. Yet, Trump's position indicates an extended trade war between the EU and US.

Key takeaways:

 Tariff Details: 

• 50% tariff on EU imports from June 1, 2025
• 25% duty on foreign-made smartphones

 Effect on Apple:

• Possible 25% duty on iPhones imported into the US if not produced locally
• Sales and profits of Apple can be hit

 Market reaction:

•  US major indexes and European stocks declined
• Dollar lost strength, gold prices climbed

Trade negotiations:

•  EU proposed reciprocal tariffs to zero
• Trump insists on maintaining a baseline 10% tariff on most imports