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On Friday, 23 May 2025, US President Donald Trump announced his intention to impose a 50% duty on all goods from the European Union starting from 1 June due to the lack of progress in trade negotiations. In addition, he threatened a 25% duty on Apple Inc. if it does not move iPhone production to the United States. These statements, published on the Truth Social platform, caused significant investor concern and led to a drop in global markets.
Escalation of the trade war
Trump said negotiations with the EU were “not progressing”, calling the 27-nation bloc “very difficult to work with”. “Our discussions with them are going nowhere! That’s why I recommend a direct 50% tariff on the European Union, starting on 1 June 2025,” he wrote. According to him, the duties will not apply to goods produced in the United States.
The move is a significant escalation of Trump’s trade policy, who previously imposed a 10% tariff on most EU imports, with the possibility of rising to 20% after 8 July if negotiations fail. The new proposal is five times higher than the previous rates and could seriously affect European goods such as cars, pharmaceuticals, luxury goods and aviation products. According to the EU, the bloc’s exports to the US totalled around €500 billion in 2024, with Germany, Ireland and Italy as the largest exporters.
Pressure on Apple
Separately, Trump addressed Apple, demanding that the company move iPhone production to the United States. “I told Apple’s Tim Cook a long time ago that I expect iPhones sold in the United States to be made in the United States, not in India or anywhere else,” he said. In case of non-compliance, Trump threatened to impose a duty of at least 25% on imported iPhones.
This statement caused Apple’s shares to fall by 3.7% in the pre-trade session and also affected other technology companies. Analysts point out that moving iPhone production to the US could be difficult due to a lack of infrastructure and higher labour costs. In addition, it is unclear whether the president can legally impose duties on a single company’s products, as US law requires that duties be applied to countries or categories of goods.
Reaction of markets and the EU
Trump’s announcement triggered an immediate reaction on the financial markets. US stock indices, including the S&P 500 and Nasdaq, fell by 1.2% and 1.5% respectively in early trading. European markets also suffered losses, with the STOXX 600 index down 1.7%, Germany’s DAX down 2.4%, and France’s CAC down 2.2%. Shares of European automakers such as Porsche, Mercedes and BMW lost between 2% and 4.5%, while shares of luxury company EssilorLuxottica fell by 5.5%.
The European Commission refrained from immediate comment, saying it was waiting for a scheduled phone call between European Trade Commissioner Maroš Šefčovič and US Trade Representative Jamieson Greer. EU ambassadors gathered in Brussels to discuss the trade situation. Earlier, the EU proposed a zero-duty agreement with the US, but Washington rejected the proposal. In response to Trump’s threats, the EU said it was ready to respond “decisively and immediately” to “unjustified” trade barriers.
Implications for the economy and Ukraine
The imposition of a 50% tariff on EU goods could lead to a significant price increase for US consumers, as importers are likely to pass on the additional costs to buyers. Economists warn of the risk of inflation and slower economic growth, which could have a negative impact on global trade. Austin Goolsbee, President of the Chicago Federal Reserve Bank, called the duties a “stagflationary” factor that raises prices and slows production.
For Ukraine, which depends on the economic stability of its Western partners, an escalation of the US-EU trade war could complicate international trade and support. Higher tariffs could weaken the European economy, reducing the EU’s ability to provide financial and military assistance to Ukraine. At the same time, pressure on the tech sector, in particular Apple, could affect global supply chains, which would also have an indirect impact on countries dependent on technology imports.
Are the threats coming true?
Analysts note that Trump’s threats may be part of a negotiating tactic, as he has previously backed down from high duties after market turmoil. For example, in April 2025, he reduced duties on Chinese goods from 100% to 10% after a significant drop in markets. Volvo CEO Hakan Samuelsson expressed hope for a deal, saying that a complete cessation of trade between the US and the EU is not beneficial to either side.
However, Trump’s current rhetoric shows his determination to implement a tough trade policy. US Treasury Secretary Scott Bessent noted that the EU’s proposals in the negotiations “do not match the quality of agreements with other trading partners” and expressed hope that the new threat would “push the EU to action”.
Trump’s recent announcements about tariffs on the EU and Apple underscore his aggressive approach to trade policy aimed at protecting American manufacturing. However, they also pose significant risks to the global economy, particularly for consumers and companies on both sides of the Atlantic. The coming days, including the US-EU talks, will be crucial in determining whether these threats will become reality or remain a tool of pressure.
Source: Bloomberg News
