Trump threatens 50% tariffs on EU and 25% penalties on Apple

Gulf Today

23-05-2025

President Donald Trump on Friday threatened a 50% tax on all imports from the European Union as well a 25% tariff on Apple products unless iPhones are made in America.
The threats, delivered over social media, reflect Trump's ability to disrupt the global economy with a burst of typing, as well as the reality that his tariffs have yet to produce the trade deals he is seeking or the return of domestic manufacturing he has promised voters.
The Republican president said he wants to charge higher import taxes on goods from the EU, a long-standing US ally, than from China, a geopolitical rival that had its tariffs cut to 30% this month so Washington and Beijing could hold negotiations. Trump was upset by the lack of progress in trade talks with the EU, which has proposed mutually cutting tariffs to zero even as the president has publicly insisted on preserving a baseline 10% tax on most imports.
'Our discussions with them are going nowhere!' Trump posted on Truth Social. '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.' That post had been preceded by a threat of import taxes against Apple for its plans to continue making its iPhone in Asia. Apple now joins Amazon, Walmart and other major US companies in the White House's crosshairs as they try to respond to the uncertainty and inflationary pressures unleashed by his tariffs.
'I have long ago informed Tim Cook of Apple that I expect their iPhone's 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.' The statement by Trump is critical in that he suggests the company itself would bear the price of tariffs, contradicting his earlier claims as he rolled out a series of aggressive tariffs over the past several months that foreign countries would shoulder the cost of the import taxes. In general, importers pay the tariffs and the costs are often passed along to consumers in the form of higher prices.
In response to Trump's tariffs on China, Apple CEO Tim Cook said earlier this month that most iPhones sold in the US during the current fiscal quarter would come from India, with iPads and other devices being imported from Vietnam. After Trump rolled out tariffs in April, bank analysts estimated that a $1,200 iPhone would if made in America jump in price anywhere from $1,500 to $3,500.
Stocks sold off after Trump's postings, with the S&P 500 index down roughly 1%. The markets have developed a hair trigger sensitivity to the US president's statements, often slumping when he announces high tariffs and rallying when he retreats from those threats.
US Treasury Secretary Scott Bessent tried to provide some clarity on Trump's postings in a Friday interview on the Fox News show 'America's Newsroom.' Bessent said the EU has a 'collective action problem' because its 27 member states are being represented by 'this one group in Brussels,' such that the 'underlying countries don't even know what the EU is negotiating on their behalf.' The Treasury secretary said he was not in a White House meeting this week that Cook attended, but he also spoke with the Apple CEO this week. Bessent said the goal was to have Apple bring more of its computer chip supply chain into the US The core of Trump's argument against the EU is that America runs a 'totally unacceptable' trade deficit with the 27 member states. Countries run trade deficits when they import more goods than they export.
From the vantage point of the EU's executive commission, trade with the US is roughly in balance if both goods and services are included. As a global centre for finance and technology, the US runs a trade surplus in services with Europe. That offsets some of the trade gap in goods and puts the imbalance at 48 billion euros ($54 billion).
German Foreign Minister Johann Wadephul said the EU's executive commission has his country's full support in working to 'preserve our access to the American market.' 'I think such tariffs help no one, but would just lead to economic development in both markets suffering,' Wadephul said in Berlin. 'So we are still counting on negotiations, and support the European Commission in defending Europe and the European market while at the same time working on persuasion in America.' Trump aides have said the goal of his tariffs was to isolate China and strike new agreements with allies, but the president's tariff threats undermine the logic of those claims. Not only could the EU face higher tariffs than China, but the bloc of member states might have been better off by establishing a broad front with China and other countries against Trump's trade policy, said German economist Marcel Fratscher.
'The strategy of the EU Commission and Germany in the trade conflict with Trump is a total failure,' Fratscher, the head of the German Institute for Economic Research, said on X. 'This was a failure you could see coming - Trump sees Europe's wavering, hesitation and concessions as the weaknesses that they are.'
Trump has run hot and cold on his relationship with Apple, a sign that currying favor with him might not necessarily shield a company from his anger.
Associated Press