Washington: President Donald Trump 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 U.S. 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.”
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.
Stock futures sold off after Trump’s postings, with the S&P 500 index futures down roughly 1.3%. 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.
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 favour with him might not necessarily shield a company from his anger. He has essentially told companies such as Walmart to “eat” the costs of his tariffs instead of raising prices, even though doing so could squeeze profits and cause layoffs. He now appears to be deploying a similar degree of pressure to force Apple to accept the higher costs of relocating its supply chains.
Trump had previously created an exemption on electronics imported from China to help companies such as Apple, something he could now remove. He also threatened separate 25% import taxes on computer chips and could have the tariffs schedule rewritten in ways that could expose Apple products to the taxes.
Until recently, the US president repeatedly bragged about the $500 billion that Apple in February pledged to invest domestically as part of its development of artificial intelligence technologies. But he publicly turned against the company last week while speaking in Qatar.
“I had a little problem with Tim Cook yesterday,” Trump told the audience. “I said to him, My friend, I treated you very good. You’re coming here with $500 billion, but now I hear you’re building all over India. I don’t want you building in India.’”
Analysts have been sceptical that Apple could quickly shift device manufacturing to the US, mainly because it has spent decades embedding complex supply chains in China to feed the factories.
“(W)e see no chance that iPhone production starts to happen in the US in the near-term given the upside down cost model and Herculean-like supply chain logistics needed for such an initiative,” wrote Wedbush Securities analyst Dan Ives.
AP
