US President Donald Trump has threatened to impose a 50% tariff on all EU imports and warned that if the iPhone is not manufactured in the United States, it will be subject to a 25% tariff.
The president announced his intentions via social media on Friday. He posted on his “Truth Social” platform: “We have made no progress in negotiations with the EU! Therefore, I propose a unified 50% tariff on the EU from June 1, 2025. Products are exempt from tariffs if they are built or manufactured in the United States. ”
The Republican president’s proposal means that the United States will tax imports from its longtime ally the European Union more than its geopolitical rival, China, which this month has reduced tariffs on Chinese goods to 30% so that the two sides can negotiate.
Trump is unhappy with the lack of progress in US-EU trade negotiations. Although he publicly insisted on maintaining the base tariff rate of 10% on most imported goods, the EU proposed reducing bilateral tariffs to zero.
Trump aides have said that his tariff policy is aimed at isolating China and reaching new agreements with allies, but German economist Marcel Flattscher pointed out that the EU faces the threat of higher tariffs than China, which may instead prompt the EU to work with China and other countries to confront Trump’s trade policy.
An ultimatum to Apple
Before threatening to raise taxes on the EU, Trump had warned that Apple would tax it because it planned to continue producing iPhones in Asia. Apple has become a target for the White House along with large U.S. companies such as Amazon and Walmart, as these companies try to deal with uncertainty and inflationary pressures brought about by tariff policies.
“I have long informed Apple CEO Tim Cook that iPhones expected to be sold in the United States must be produced in the United States, not in India or elsewhere,” Trump wrote, “otherwise Apple must pay at least 25% tariffs to the United States.” ”
The key to this statement is to imply that Apple will bear the cost of tariffs rather than foreign countries, which contradicts his previous claim that tariffs will be paid by foreign countries. Usually importers pass on the cost to the consumer after paying the customs duties.
Late Friday, Trump told reporters in the Oval Office that the proposed Apple tariffs would also apply to “Samsung and any business that makes such products,” apparently referring to smartphone manufacturers. He also expects the new tariffs to be implemented by the end of June.
In response to Trump’s tariffs on China, Apple CEO Tim Cook said earlier this month that most of the iPhones sold in the United States in the current fiscal quarter will be produced in India, and iPads and other devices will be imported from Vietnam.
According to analysts, if produced in the United States, the cost of a $1,200 iPhone could jump to $1,500-$3,500. Dan Ives, an analyst at Wedbush Securities, pointed out: “It will take 5-10 years to move iPhone production to the United States and will cause it to cost $3,500, which is completely unrealistic, it is simply a fairy tale.” ”
Trump has previously granted exemptions to Chinese electronics imports to help companies such as Apple, but now he may cancel the policy. He also threatened to impose a separate 25% import tax on computer chips and possibly bring Apple products into the tariff by rewriting the tariff details.
Just recently, Trump has repeatedly boasted that Apple promised to invest $500 billion in the United States to develop artificial intelligence technology in February. But during a speech in Qatar last week, Trump suddenly publicly criticized the company: “Yesterday Cook and I had a little problem. I said to him, ‘Friend, I treat you well. You came with $500 billion to invest, and now you hear that you are building factories everywhere in India. I don’t want you to produce in India’. ”
Global reaction
German Foreign Minister Wadfur expressed full support for the European Commission to “safeguard European market access”, believing that tariffs “will only harm the economic development of both sides” and still hope for a negotiated solution. Dutch Prime Minister Schoff expects the EU to respond calmly and forcefully to the threat of US tariffs.
Volvo Cars CEO Hanken Samuelson told Reuters that the tariffs will push up consumer prices and limit sales of its Belgian-produced EX30 electric models in the United States.
The market reaction was violent: as of 10:30 New York time (14:30 GMT), the Dow Jones index fell 0.6%, the Nasdaq index fell 1%, and the S&P 500 index fell 0.8%; Apple’s stock price fell 2.3% from yesterday’s close; The share price of SAP, the highest market capitalization in Europe, fell 1.8%, and Novo Nordisk, the second largest company by market capitalization, fell 1%; LVMH and Hermès, which have the highest market capitalization in France, fell by about 3% and 4% respectively.