Trump says talks with E.U. are 'going nowhere,' threatens 50% tariff in June
In a post on his Truth Social platform, Trump wrote that he was "recommending a straight 50% Tariff on the European Union, starting on June 1, 2025." That rate would be higher than the 39% Trump promised to hit the bloc with on April 2's so-called Liberation Day.
Just minutes earlier, Trump had also threatened Apple with a 25% tariff if it does not start producing iPhones in the United States — an outcome industry experts broadly see as a nonstarter. "The concept of Apple producing iPhones in the U.S. is a fairy tale," prominent tech analyst Dan Ives said in response to Trump's threat Friday.
The early morning posts risked reigniting the trade war Trump started in April that had cooled down in recent weeks. His administration had been speaking positively about ongoing trade talks, even though it has so far secured few concrete economic wins. The president has backed down from some of his most severe tariffs, sparking a comeback for U.S. and global markets.
That rebound looked poised to reverse after Trump's posts, with stock indexes in Germany, France and Italy each dropping nearly 3%. The Stoxx 600, which tracks hundreds of stocks across Europe, plunged more than 2%. Shares in the United Kingdom dropped more than 1%, even though it is not a member of the E.U.
U.S. stocks opened sharply lower, with the S&P tumbling 1.3%, the Dow falling about 500 points, and the Nasdaq Composite plunging 1.7%.
A number of companies with major U.S. and E.U. operations also saw their shares fall. Deutsche Bank shares plunged 4%, carmakers BMW and Stellantis, the maker of Jeep trucks, dropped 3.5%, and tech giant SAP fell 2%. Cosmetics firm L'Oreal also dropped more than 2%, and luxury goods conglomerate LVMH dropped 3%.
Trump has repeatedly assailed the European Union, calling it 'in many ways, nastier than China." On tariff rates and what the U.S. calls "non-tariff barriers," Trump has said, "They'll come down a lot. You watch." But the bloc has refused to alter its value-added tax, a frequent point of contention for Commerce Secretary Howard Lutnick and other U.S. officials.
Speaking on CNBC shortly after Trump's social media posts, Chicago Federal Reserve President Austan Goolsbee noted, "10% was going to be the highest tariff rate that we had on the world in 90 years. To go to 50% is a completely different order of magnitude."
Goolsbee added that it would be "really scary for the supply chain" if businesses in his Midwest district, which includes auto hub Detroit, would see tariff rates as high as 50%.
The E.U. bloc is America's second-biggest trading partner behind China. The United States exported more than $350 billion of goods to the 27-nation bloc in recent years and imported $550 billion worth of goods.
Maros Šefčovič, the European Commission's trade chief, is set to speak by phone with U.S. Trade Representative Jamieson Greer on Friday morning, just hours after Trump's post.
The E.U. has been bracing itself for months for the possibility that trade talks with the U.S. would fail. In early May, Šefčovič said the bloc preferred negotiations, "but not at any cost. We therefore continue to prepare for every scenario." The following day, the E.U. announced more than $100 billion worth of possible retaliatory tariffs on U.S. goods.
"With the exception of the E.U., most [countries] are negotiating in very good faith," Treasury Secretary Scott Bessent said Friday morning on Fox News. "I would hope that this would light a fire under the E.U."
In 2024, pharmaceutical products were the E.U.'s top export to the U.S., with more than $90 billion crossing the Atlantic, followed by more than $45 billion of vehicles and automotive products. The U.S. also imported more than $300 billion of E.U. services. Telecom, information technology and scientific services were the top imports.
This article was originally published on NBCNews.com
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