Trump threatens European Union with 50% tariffs from June

Akash Sriram, Reuters

US president Donald Trump has cranked up his trade threats again, targeting both smartphone giant Apple along with imports from Ireland and the rest of the European Union.

The move sent global markets roiling on Friday afternoon after weeks of de-escalation provided some reprieve.

Trump said he would recommend a 50 per cent tariff on the European Union to begin on June 1st, which would result in stiff levies on luxury items, pharmaceuticals and other goods produced by Irish and European manufacturers.

The president also threatened to impose a 25 per cent tariff on Apple for any iPhones sold, but not manufactured, in the United States. More than 60 million phones are sold in the United States annually, but the country has no smartphone manufacturing.

Markets dropped on the news. S&P 500 futures lost 1.5 per cent in premarket activity and the Eurostoxx 600 fell 2 per cent. Shares of Apple fell 3.5 per cent in premarket trading, along with shares of other technology bellwethers. Trump did not give a time frame for his warning to Apple.

"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," Trump said in a post on Truth Social. "If that is not the case, a Tariff of at least 25 per cent must be paid by Apple to the U.S."

The White House has been in negotiations with numerous countries over trade issues, but progress has been unsteady.

Trump's aggressive tariffs in April, which would have raised the rate consumers and businesses would have to pay for imported goods by roughly 25 per cent, sparked a selloff in US assets, including stocks, the dollar and Treasury bonds. Markets have since rebounded.

It is not clear if Trump can levy a tariff on an individual company. Apple did not immediately respond to a Reuters request for comment.

After Trump's levies on China rose to more than 100 per cent in early April, the White House backed off due to market turmoil, granting exclusions from steep tariffs on smartphones and some other electronics imported largely from China, in a break for Apple and other tech firms that rely on imported products.

Apple aims to make most of its iPhones sold in the United States at factories in India by the end of 2026, and is speeding up those plans to navigate potentially higher tariffs in China, its main manufacturing base, a source told Reuters.

Apple is positioning India as an alternative manufacturing base amid Trump's tariffs on China that have raised supply-chain concerns and fears of higher iPhone prices, Reuters reported last month.

The iPhone maker said most of its smartphones sold in the United States would originate from India in the June quarter.