President Donald Trump has issued a threat to impose 50% tariff on goods from the European Union, stating his administration’s displeasure with what he sees as stalled trade talks.
He also warned Apple that it must manufacture iPhones in the United States or face a 25% import duty.
The announcement, made through multiple posts on Trump’s social media platform, is an escalation in his confrontational trade strategy. The tariffs, he stated, would take effect from 1 June 2025 unless the EU yields to his demands.
“Our discussions with them are going nowhere!” he wrote. “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.”
The EU exported approximately €500 billion worth of goods to the U.S. last year, including €161 billion from Germany, €72 billion from Ireland, and €65 billion from Italy. The proposed tariff hike will hit major industries hard, automotive, pharmaceuticals, chemicals, and luxury goods among them.
Apple Plans to Start Assembling All U.S.-Sold iPhones in India by 2026
Trump has turned his attention to Apple, reiterating a long-standing demand that iPhones sold in America should be manufactured domestically, or now face new tariff.
“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,” he posted. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
This statement triggered a quick reaction on Wall Street. Apple shares dropped by 2.3%, while indexes tumbled, S&P 500 fell 0.9% and Nasdaq shed 1.5%. Investors, already on edge, responded to what many see as erratic and unpredictable economic policymaking.
What makes the situation bigger is Trump’s apparent reversal on who bears the burden of tariffs. In earlier phases of his trade wars, he claimed foreign exporters would pay. Now, he insists companies like Apple must absorb the cost, even though in practice, it’s often consumers who end up paying higher prices.
Bank analysts have estimated that if Apple moved all iPhone production to the U.S., the retail price of a $1,200 device could surge to between $1,500 and $3,500 due to labour and supply chain costs. Most iPhones sold in the U.S. this quarter are being assembled in India, with others coming from Vietnam, according to Apple CEO Tim Cook.
Scott Bessent, U.S. Treasury Secretary, attempted to clarify the administration’s stance in an interview with Fox News. He blamed the EU’s slow progress on trade reform on its “collective action problem,” adding that many member states are unaware of the full scope of negotiations taking place in Brussels.
The European Commission has so far remained tight-lipped, choosing instead to wait for a scheduled conversation between EU trade chief Maroš Šefčovič and U.S. counterpart Jamieson Greer. However, officials within the bloc are worried behind closed doors.
German Foreign Minister Johann Wadephul said, “I think such tariffs help no one, but would just lead to economic development in both markets suffering. 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’s allies argue that his tariff threats are meant to bring trading partners to the table. His critics, however, believe the policy is economically reckless and politically short-sighted.
Marcel Fratscher, head of the German Institute for Economic Research, wrote pointedly, “The strategy of the EU Commission and Germany in the trade conflict with Trump is a total failure. This was a failure you could see coming—Trump sees Europe’s wavering, hesitation and concessions as the weaknesses that they are.”
Private firms across Europe are facing the issue. Major carmakers, BMW, Mercedes, Porsche, saw their shares fall between 2% and 4.5%. Even eyewear giant EssilorLuxottica took a 5.5% hit.
Volvo Cars CEO Håkan Samuelsson said: “Customers would have to pay a large part of tariff-related cost increases, and it could become impossible to import the smallest cars in the company’s lineup to the United States.”
However, Trump hasn’t provided clear timelines or outlined concrete terms. His administration is dangling threats while hinting at exemptions and special deals. It’s a waiting game, with global markets and international partners caught in the middle.
There is little doubt that Apple, already facing the complexity of relocating a global supply chain, is under pressure. Despite pledging $500 billion in domestic investment over the next four years, the company has not committed to bringing iPhone manufacturing home.
Commerce Secretary Howard Lutnick and Trump have both floated the idea publicly, but insiders question the feasibility.
“It is hard to imagine that Apple can make iPhones in the U.S. without incurring enormous costs,” one senior analyst commented. “It’s not just about money—it’s about time, talent, and infrastructure.”
Trump, however, appears unmoved. Speaking recently in Qatar, he said: “I had a little problem with Tim Cook yesterday. 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.’”
