Just when everyone thought Donald Trump’s trade war and tariff frenzy had finally reached a period of weary — if expensive — attrition, the president made sure to remind everyone that his trade policy is just as erratic and arbitrary as ever.
Trump is now threatening to level steep tariffs on iPhones and the European Union.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s 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 early Friday morning on Truth Social. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
In another post, the president added that he would be “recommending a straight 50% Tariff on the European Union, starting on June 1, 2025.”
“Our discussions with them are going nowhere,” Trump added, claiming that “their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable.”
Financial markets did not respond kindly to the social media posts, with Dow, S&P 500, and Nasdaq futures all dropping on Friday morning.
The announcement signals to nations attempting to negotiate trade agreements with the administration — to extremely limited success — that the American president is not committed to respecting the 90-day pause on the enactment of steep, potentially devastating reciprocal tariffs on dozens of countries. Earlier this month, as talks with the U.S. seemed to reach a stalemate, the European Union drafted a list of over $100 billion worth of American imports that could be tariffed in retaliation for Trump’s tax penalties.
The Trump administration is still imposing a 51-percent effective tariff rate on Chinese imports, while China is responding with a 32-percent effective tariff rate on U.S. products. Those rates are down from a peak of 147 percent and 125 percent, respectively. While the lowering of import penalties brought some relief to American businesses, major retailers like Walmart and Target are warning that prices are still expected to increase for American consumers so long as tariffs remain in place.
While Apple designs its products in the United States, they are primarily manufactured abroad. In recent years, the Silicon Valley giant has attempted to move some of its production out of China and into friendlier nations like India. If produced in the United States, the price of iPhones could rise by thousands of dollars given both the hefty upfront cost of building factories, and supply chain issues related to its various components.
