In a dramatic turn in global trade policy, U.S. President Donald Trump has reignited fears of a full-blown trade war by proposing steep new tariffs targeting the European Union and tech giant Apple. The twin threats, made on May 23 via Trump’s social media platform Truth Social, sent shockwaves through global markets and drew cautious responses from international leaders and economists.
Trump’s Trade Ultimatum
Trump declared his intent to impose a 50% tariff on all goods imported from the European Union beginning June 1, citing stalled trade negotiations. The former president, known for his confrontational approach to global trade, accused the EU of being “formed primarily to take advantage of the United States” and called the bloc’s trade behavior “difficult.”
As part of the same announcement, Trump also warned Apple that any iPhones manufactured outside the U.S. would face a 25% import tariff, unless the company shifted production to American soil.
The markets responded quickly and negatively. The S\&P 500 dropped 0.9% at opening bell, while the Nasdaq fell by 1.5%. In Europe, key stock indices dipped, with shares of automakers like Porsche, Mercedes, and BMW dropping between 2% and 4.5%. Luxury goods company EssilorLuxottica saw a 5.5% decline.
Apple, directly targeted by Trump’s warning, saw its shares tumble 2.3% amid growing uncertainty over how the company will manage its global manufacturing strategy. With over 60 million iPhones sold in the U.S. annually and no domestic smartphone production facilities, Apple faces a major logistical and financial hurdle.
While Apple has not officially commented on the tariff threat, the company has already begun transitioning some of its iPhone production to India. According to sources close to the company, Apple plans to shift a majority of its U.S.-bound iPhone production to Indian factories by 2026. However, experts say this move may not be enough to satisfy Trump’s demand for domestic production.
In February, Apple pledged to invest \$500 billion across nine U.S. states over four years. While this investment covers hiring and infrastructure development, it does not include plans to manufacture iPhones in the United States.
Industry analysts are skeptical about Apple’s ability to meet Trump’s demand in the short term. “It is hard to imagine that Apple can be fully compliant with this request from the president in the next three to five years,” said Gil Luria, a senior analyst at D.A. Davidson & Co.
Legal experts also question whether Trump can impose tariffs targeting a single company. Sally Stewart Liang, a partner at Akin Gump in Washington, noted that such a move would likely face legal challenges. “There’s no clear legal authority that permits company-specific tariffs,” she said, suggesting Trump would need to invoke emergency powers or conduct lengthy investigations under anti-dumping laws.
A 50% tariff on EU imports could significantly raise prices for American consumers on goods such as German vehicles, Italian olive oil, and French cosmetics. According to EU data, the bloc exported approximately €500 billion worth of goods to the U.S. in 2024, with Germany, Ireland, and Italy being the top contributors.
Despite the aggressive stance, some industry leaders remain hopeful. Volvo CEO Hakan Samuelsson said he believed a resolution was possible. “It could not be in the interest of either Europe or the U.S. to shut down trade between them,” he stated.
As trade envoys from the 27 EU nations prepared to meet in Brussels, and high-level calls between U.S. and EU trade officials were scheduled, the international community awaited further clarity.
Whether Trump’s threats are a negotiating tactic or a prelude to actual policy changes remains to be seen. But the message was clear: global trade stability hangs in the balance as Trump reignites his tariff playbook with new targets in sight.
