Trump turns back to his trade war, threatening Europe and Apple

President Donald Trump threatened to revive his global trade wars Friday, adding a fresh dose of chaos to trade relationships that had calmed somewhat in recent weeks.

The president had focused his attention on a trip to the Middle East and a tax bill on Capitol Hill. But Friday, Trump returned to tariffs, saying he would apply a steep tax to European exports starting in just over a week and warning Apple and other phone manufacturers that their products made outside the United States would face a 25% tariff, most likely beginning next month.

The threats caused stocks to sink and renewed risks to the global economy, as similar announcements made by the president have in recent months. If enacted, economists said the tariffs would pose significant costs for Apple, one of the world’s most valuable companies, and rupture U.S. trade with the European Union, the largest trading relationship in the world by some measures.

The president wrote on Truth Social on Friday morning that discussions with the EU “are going nowhere” and that he was recommending a 50% tariff on European imports as of June 1.

“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with,” Trump wrote. He claimed the bloc’s trade barriers, taxes, corporate penalties and other policies had contributed to a trade imbalance with the United States that was “totally unacceptable.”

In an earlier social media post, the president targeted Tim Cook, the CEO of Apple, who visited Trump at the White House this week. The president wrote that iPhones sold in the United States should be “manufactured and built in the United States, not India, or anyplace else.”

On Friday afternoon, Trump told reporters in the Oval Office that the 25% tariff on iPhones might not be limited just to Apple, but could also be applied to Samsung or any other smartphone company that makes its product outside the United States. He said otherwise it wouldn’t be fair. He added that the tariffs would start “I guess the end of June.”

The president also denied that he was looking for a deal with Europe. When asked if there was anything Europe could do to avoid tariffs, he responded, “I don’t know, we’re going to see what happens.”

“They’ve treated us very badly over the years,” he added.

The president continued, saying that “I just said, it’s time that we play the game the way I know how to play the game.”

U.S. markets opened sharply lower, with the S&P 500 index falling more than 1% as trading began, before ending the day down less than 0.7%. Apple shares dropped 3%. In Europe, carmakers’ shares were the worst hit. Shares in Stellantis and Mercedes-Benz fell about 4.5%, and shares in Volkswagen and Porsche were down more than 3%.

Estimates by the Kiel Institute for the World Economy, a German economic research institute, showed that the tariffs would lead to a 20% drop in exports from the EU to the United States in the short term, as well as a more than 6% increase in prices in the United States.

Austan Goolsbee, the president of the Federal Reserve Bank of Chicago, warned on CNBC on Friday that the proposed import taxes raised the risk of higher prices and lower growth, calling them “really scary for the supply chain.”

Goolsbee added that the uncertainty had made it difficult for businesses to continue to invest. Quoting a chief executive of a construction company that the Fed spoke to recently, he said, “We’re now in a ‘put your pencils down’ moment.”

“If every week or every month or every day there’s going to be a new major announcement, they just can’t take action until some of those things are resolved,” he said.

Trump announced tranche after tranche of tariffs in his first 100 days, only to pause some of the taxes last month to try to negotiate trade deals with other governments. His approach has injected volatility into global financial markets and caused uncertainty among companies that depend on trade.

The Trump administration has been holding trade talks with over a dozen governments, including the EU, to try to reach some kind of trade agreement before many tariffs are set to snap back into effect in early July. But some foreign officials say the Trump administration has not made its demands clear and they are hesitant to make big concessions when Trump could slap tariffs on them again at any time.

On Fox News on Friday, Treasury Secretary Scott Bessent said trade offers from Europe had “not been of the same quality” that the United States had received from other countries and that he hoped the president’s threats would “light a fire under the EU.”

The European Union’s trade commissioner, Maros Sefcovic, held a call with Jamieson Greer, the U.S. trade representative, on Friday. Sefcovic said in a post after the meeting that “the EU’s fully engaged, committed to securing a deal that works for both,” but added that “EU-US trade is unmatched & must be guided by mutual respect, not threats. We stand ready to defend our interests.”

Officials from the 27-nation EU have been negotiating for weeks with their U.S. counterparts, hoping to reduce a 10% tariff Trump has applied to countries globally and to reduce or avert the sector-specific tariffs he has imposed or proposed on products like cars and pharmaceuticals, which could be especially painful for the bloc.

To placate Trump, the EU has offered to reduce tariffs on industrial goods to zero, if the U.S. does the same, and increase purchases of U.S. energy.

Bessent, who met with top finance officials from the world’s wealthiest economies in Canada this week, claimed on Fox News on Friday that countries in the European Union “don’t even know what the EU is negotiating on their behalf.”

When EU negotiators visited Washington a few weeks ago, they took along a term sheet: a brief summary of what officials are willing to offer and talk about to secure a deal. The EU had shared its term sheet with representatives from the European member states before the trip, diplomats said.

Sabine Weyand, a senior negotiator, and other European trade officials have recently visited Washington to negotiate with their American counterparts. But those meetings have yielded few breakthroughs and little sense of direction, according to EU officials and diplomats who spoke on the condition of anonymity to discuss ongoing deliberations.

European officials often fret that they do not have a clear sense of what their U.S. counterparts want, or of who has decision-making power within the Trump administration, outside of the president.

Amid slow progress, the EU has continued to prepare countermeasures that would hit back with higher tariffs on a range of American goods, including machinery, clothing, soybeans and, potentially, bourbon. The goal has been to prod the U.S. to negotiate, but the approach has won few fans in Washington.

Commerce Secretary Howard Lutnick, one of the bloc’s key contacts in Washington, described the EU as one of the governments that have been challenging to negotiate with.

“There are some countries that are impossible, like the European Union,” Lutnick said at an Axios event Thursday. “It’s just very difficult.”

In another interview Thursday night on NewsNation, Lutnick praised Trump’s negotiating strategy, saying, “The world is working the way Donald Trump thinks it’s going to work. And anybody who bets against Donald Trump is just going to feel the pain of getting it wrong.”

“Look, the president knows the art of the deal,” Lutnick said, adding, “We’re just not going to get ripped off anymore.”

Trump’s aggressive approach could have other economic ripple effects, as foreign leaders try to diversify their trade ties beyond the United States. Hours before Trump threatened to sharply increase tariffs on Europe, Xi Jinping, the president of China, held a telephone call with Friedrich Merz, the chancellor of Germany, continuing Beijing’s recent efforts to coax European governments away from Washington.

Xi offered China as a reliable economic partner to Germany and the EU, and said both sides should continue expanding cooperation in areas like automobiles, machinery and chemicals as well as advanced technology.

Trump’s early morning threats also targeted one of America’s most valuable companies, which has seen its share price whipsaw with the president’s trade plans. Within four days in early April, after Trump announced tariffs of up to 145% on products made in China, Apple lost $770 billion in market value. But in the month that followed, its value rebounded to more than $3 trillion.

Apple has promised to spend more than $500 billion in the United States over the next four years. Much of that money was already planned to be spent in the country, but Apple has said it will buy 19 billion artificial intelligence chips made in the United States and begin manufacturing AI servers in Houston.

But the company hasn’t said anything about producing iPhones, iPads or Macs in the United States, which has become a sore point with Trump. Some analysts have estimated that moving manufacturing to the United States could more than double the consumer price of an iPhone.

Trump said Friday that Apple had been building plants in India, and that he had told Cook that the company should expect to face tariffs selling into the United States. “I had an understanding with Tim that he wouldn’t be doing this,” the president said.

In China, Apple and its component suppliers are all clustered together around assembly plants longer than football fields. Thousands of engineers and other employees working for Foxconn, a major supplier, and other firms live nearby, often in dormitories. The logistical infrastructure has been built up over years and would be incredibly difficult, if not impossible, to replicate in the United States.

Apple has said that people from more than 50 countries and regions contribute to making its products. AirPods and Apple Watches are assembled in Vietnam. Some iMacs are made in Ireland. Components are manufactured in China.

Apple assembled nearly every iPhone in China a few years ago, but it has been gradually moving production out of the country as trade tensions and costs there rise. By the end of this year, an estimated 25% or more of iPhones will be made in India.

This article originally appeared in The New York Times.

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