US President Donald Trump has announced his recommendation for a 50% tariff on all goods imported from the European Union into the United States.
“Our discussions with them are going nowhere!” he stated in a social media post on Friday. He indicated that the new tariffs would take effect on June 1.
This announcement signifies an escalation in Trump’s trade conflict with the EU. Initially, he suggested a 20% tariff on the majority of EU products, but later reduced it to 10% until July 8 to provide time for negotiations.
Additionally, the president warned of a potential 25% import tax “at least” on iPhones that are not produced in America.
“I previously notified Tim Cook of Apple that I anticipate the iPhones sold in the United States of America will be produced and assembled domestically, rather than in India or any other location,” Trump stated. “Should this not occur, Apple will be required to pay a tariff of no less than 25% to the U.S.” Analysts indicated that it remains uncertain whether these threats will materialize. Since his return to the White House, Trump has enacted and threatened various tariffs on products from numerous countries, viewing this as a means to enhance U.S. manufacturing and safeguard jobs from international competition. The potential implementation of increased tariffs on imports to the U.S. has unsettled many global leaders, as it would raise costs and complicate the ability of businesses to market their products in the world’s largest economy. However, Trump has also retreated from some of his most extreme proposals following turmoil in financial markets and backlash from businesses in the U.S.
“Remain composed and proceed”
The European Union has yet to respond to the most recent threat, which emerged just prior to the scheduled trade discussions between the two parties. Trade analyst Aslak Berg from the Centre for European Reform expressed his belief that Trump’s statement was aimed at enhancing his negotiating position ahead of these talks. “It is important to remember that, at this moment, this constitutes a threat. It is not an official declaration. There is no executive order in place,” he remarked. A tariff refers to a domestic tax imposed on goods upon their entry into a nation, calculated based on the value of the import, and is the responsibility of the importing business. “However, the reality is that the EU is unlikely to yield. They will remain composed and proceed, making for a challenging discussion this afternoon.” On Friday, shares in both the US and EU experienced declines following the threats, with the S&P 500 decreasing by approximately 1% and Germany’s Dax dropping over 1.7%. Apple’s shares, which had previously benefited from Trump’s exemption of essential electronics, including smartphones, from tariffs last month, opened more than 2% lower.