U.S. President Donald Trump once again turned up the heat on America’s trading partners. On Friday, he threatened to slap a 50% tariff on all European Union goods entering the U.S., just hours before scheduled trade talks. This has placed international trade relations back under strain. At the heart of the tension is the United States’ deepening trade deficit with the European Union, more than $600 billion in goods were exported from the EU to the U.S. last year, compared to $370 billion flowing the other way.
Trump first imposed a 20% tariff on most EU imports last month but temporarily reduced it to 10% through July 8 to allow space for negotiation. Now, that olive branch appears to be withering. “I’m not looking for a deal – we’ve set the deal,” Trump said bluntly from the White House. Yet in a moment of flexibility, he hinted that a substantial investment from a European firm might prompt a delay.
His tone toward Apple was equally sharp. Trump warned the company it could face at least a 25% import tax if it continues manufacturing iPhones outside the U.S. Although Apple was previously granted a tariff exemption, that relief appears to be on shaky ground. “We’re going to see what happens,” Trump said, suggesting the new duties could be imposed by the end of June.
The response from Europe was swift and critical. EU Trade Commissioner Maroš Šef?ovi? emphasized that trade must be rooted in “mutual respect, not threats.” He added firmly, “We stand ready to defend our interests.” Ireland’s Taoiseach, Micheál Martin, stressed that “negotiations are the best and only sustainable way forward,” while France and Germany also voiced their readiness to respond if provoked. German Economy Minister Katherina Reiche put it simply: “We need more trade, not less.”
Trump’s assertive strategy may be aimed at gaining leverage, but some experts believe it’s a risky gamble. Aslak Berg, a trade analyst from the Centre for European Reform, stated, “The EU is not going to budge. They are going to stay calm, carry on, and it will be a very difficult discussion.” He added that Trump’s unpredictable approach sets “a bad precedent” for other trade deals.
The markets didn’t respond kindly. U.S. and European stocks slid following the announcement that Germany’s DAX and France’s CAC 40 each lost over 1.5%, while the S&P 500 dropped 0.7%. Apple shares, which had seen a reprieve last month, fell by about 3%.
Trump’s focus on Apple highlights his ongoing dissatisfaction with U.S. tech giants’ manufacturing abroad. After a recent meeting with Apple CEO Tim Cook, Trump reiterated his wish to see production moved to the U.S. However, analysts like Dan Ives of Wedbush Securities dismissed this ambition as unrealistic: “The idea that Apple would make iPhones in the US is a fairy tale that is not feasible.”
Apple, meanwhile, has already begun shifting production to countries like India and Vietnam, sidestepping direct conflict with Chinese manufacturing but not necessarily answering Trump’s call.
U.S. Treasury Secretary Scott Bessent hoped the tariff threat would “light a fire under the EU,” but that fire may end up scorching more than just trade talks.
