Trump threatens tariffs on European Union, Apple as his trade war intensifies

Washington: President Donald Trump on Friday threatened a 50 per cent tax on all imports from the European Union and a 25 per cent tariff on Apple products unless iPhones are made in America.

The threat to the EU, a long-standing US ally, comes after Trump cut tariffs on geopolitical rival China this month to 30 per cent, so Washington and Beijing could hold negotiations.

Trump leaves the White House en route to one of his golf courses for a cryptocurrency dinner.Credit: AP

In response, the EU’s leading trade official said the bloc remained committed to securing a deal, but was ready to “defend its interests”.

Wall Street appeared rattled by the threats, with stocks falling and the dollar hitting its lowest level since December 2023.

Trump’s comments, delivered over social media, reflect his 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.

Trump appeared upset by the lack of progress in trade talks with the EU, which has proposed mutually cutting tariffs to zero, even as he has publicly insisted on a baseline 10 per cent on most imports.

“Our discussions with them are going nowhere!” Trump posted on Truth Social. “Therefore, I am recommending a straight 50 per cent 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.”

Speaking later in the Oval Office, Trump stressed that he was not seeking a deal with the EU and might delay the tariffs if more companies invested in the United States.

“I’m not looking for a deal,” the president told reporters. “We’ve set the deal. It’s at 50 per cent.”

The EU’s top trade official, Maros Sefcovic, posted on X that he had spoken to US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.

“The EU’s fully engaged, committed to securing a deal that works for both,” Sefcovic said. “EU-US trade is unmatched & must be guided by mutual respect, not threats. We stand ready to defend our interests.”

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.Credit: Bloomberg

Trump has also threatened import taxes against Apple for its plans to continue making its iPhone in Asia. The tech giant now joins Amazon, Walmart and other major US 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 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 wrote.

“If that is not the case, a Tariff of at least 25 per cent must be paid by Apple to the US”.

‘I think such tariffs help no one, but would just lead to economic development in both markets suffering’

Johann Wadephul, German foreign minister

That statement appears critical in that Trump suggests the company itself would bear the price of tariffs, contradicting his claims as he rolled out aggressive tariffs on foreign countries in recent months. In general, importers pay the tariffs and the costs are often passed along to consumers in the form of higher prices.

In response to Trump’s China tariffs, Apple’s 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 $US1200 iPhone would, if made in America, jump in price anywhere from $US1500 to $3500.

‘This one group in Brussels’

Speaking to Fox News, US Treasury Secretary Scott Bessent tried to provide some clarity on Trump’s postings.

Bessent said the EU had a “collective action problem” because its 27 member states were being represented by “this one group in Brussels,” such that the “underlying countries don’t even know what the EU is negotiating on their behalf”.

Treasury Secretary Scott Bessent wants Apple to bring more of its computer chip supply chain into the US.Credit: Bloomberg

The Treasury secretary said he was not in a White House meeting this week that Cook attended, but he also spoke with the Apple chief executive this week. Bessent said the goal was to have Apple bring more of its computer chip supply chain into the US.

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, offsetting some of the trade gap in goods and leaving the imbalance at €48 billion ($84 billion).

German Foreign Minister Johann Wadephul said the EU 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 previously 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.

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 on Apple.

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 to impose separate 25 per cent import taxes on computer chips and could have the tariffs schedule rewritten in ways that could expose Apple products to the taxes.

Until recently, Trump repeatedly bragged about the $500 billion that Apple pledged in February 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 $US500 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 manufacturing to the US, mainly because it has spent decades embedding complex supply chains in China to feed the factories.

AP / Bloomberg

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