Trump Hammers the Markets with New Scorched Earth Trade War on Apple and Europe

Yahoo

a day ago

Donald Trump reignited his scorched-earth trade war on Friday, unleashing a fiery social media tirade that took aim at Apple and Europe with fresh tariff threats.
In classic flip-flop fashion, the president is back on the offensive. Just weeks after hitting pause on his so-called 'reciprocal' tariffs amid market turmoil, he's doubling down with predictable results sending Dow Futures plunging by around 400 points in early trading.
In blistering posts on Truth Social on Friday morning, Trump warned that Apple would face a 25 percent tariff unless it moves iPhone production to the U.S. He also said he is 'recommending' a 50 percent tariff on the European Union starting June 1, escalating tensions with the continent that is traditionally one of America's closest allies.
The EU 'has been very difficult to deal with,' Trump wrote. 'Our discussions with them are going nowhere!'
Increased tariffs on Europe would lead to huge effective taxes on luxury goods.
'We've had this de-escalation tailwind at the market's back for like six weeks now — and the market has had one of its best six-week stretches in the last 75 years — and a re-escalation of trade war rhetoric threatens that,' Ross Mayfield, an investment strategist, told CNBC.
Trump's first call of order was to escalate his stand-off with Apple CEO Tim Cook after the tech giant signaled it would switch assembly of its iPhones for the U.S. market to India.
The president threatened the company after Cook failed to bend the knee and was a notable absentee from the tech mogul road trip to the Mideast last week. The California giant's shares immediately fell 3 percent in premarket trading.
After previously reversing tariffs on Apple goods, Trump said the tech company will face a 25 percent tariff if production for iPhones isn't shifted to the U.S.
'I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,' Trump wrote.
'If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S,' he added. 'Thank your for your attention to this matter!'
His warning came days after Cook said that factories in India would soon supply the 'majority' of iPhones sold in the U.S., as the tech company attempts to swerve the tariffs Trump has slapped on Chinese-made products.
Apple plans to source the 60 million iPhones sold annually in the U.S. from India by the end of 2026, according to the Financial Times. The newspaper also reported Friday that Foxconn, a key Apple supplier, is investing $1.5 billion to ramp up production of the company's best-selling product in India.
According to Reuters, it's unclear if Trump can slap tariffs on an individual company.
The very public warning came days after Trump said he told his 'friend' Cook that he 'had a little problem' with him looking to build Apple products in India.
'I said to Tim… 'Tim look, we treated you really good…India can take care of themselves ... we want you to build here,'' Trump said.
The Daily Beast has contacted Apple for comment.
Trump took aim at the EU some 30 minutes later, over what he said was stalled trade negotiations between the key trading partners.
'The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with,' the president said.
'Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable,' he ranted.
Trump added: 'Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States.'
Top U.S. and EU trade officials were expected to hold talks Friday to assess progress in their ongoing tariff negotiations, the Wall Street Journal reported. Officials have a prearranged call at 11:30 a.m. and the EU won't comment on Trump's threats until after that call takes place said, an official said.
The outburst came after weeks of market chaos triggered by Trump's sweeping 'reciprocal tariffs' on more than 180 countries.
He announced a 90-day pause just a week later, granting a brief window for trade deal negotiations to take place between every country besides China—though the U.S. and China had finally agreed to a 90-day truce beginning May 14 to significantly lower tariffs.