President Donald Trump on Friday said he is “recommending a straight 50% Tariff on the European Union” after complaining that trade negotiations have stalled.
The steep new import duties would start on June 1, Trump wrote on Truth Social.
The EU “has been very difficult to deal with,” Trump wrote of the 27-nation bloc. “Our discussions with them are going nowhere!”
Trump’s announcement came less than 30 minutes after he threatened to impose a tariff of at least 25% on Apple‘s iPhones if the company did not start manufacturing them in the United States.
U.S. stock futures sank immediately following the posts, which showed the Republican president once again wielding the threat of massive import taxes in response to economic activity he disfavors.
European stock markets fell 2%.
“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with. 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. Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% 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. Thank you for your attention to this matter!”
It’s a reversal in momentum for Trump, who recently touted preliminary trade “deals” with China and the United Kingdom and has backed off other tariff proposals. Markets were encouraged by those moves, as investors felt relief from the economic uncertainty and instability Trump’s tariffs had threatened to create.
But Trump “believes that the EU proposals have not been of the same quality that we’ve seen from our other important trading partners,” U.S. Treasury Secretary Scott Bessent said in a Fox News interview Friday morning.
Asked if the EU will be able to negotiate in the nine days before the 50% tariffs kick in, Bessent said, “I would hope that this would light a fire under the EU.”
Meanwhile, the White House view Friday morning was that the stock market was overreacting to Trump’s tariff comments, CNBC’s Eamon Javers reported.
The White House, said Javers, did not interpret the president’s post as a formal statement of policy.
Javers noted that U.S. Trade Representative Jamieson Greer has a call with his European counterparts later today, so the president’s post earlier today may have been an attempt to create space and leverage for Greer to negotiate.
But Trump’s posts almost certainly turned up the heat on the EU ahead of Greer and European Trade Commissioner Maros Sefcovic’s meeting, set for 11 a.m. ET.
Greer was expected to tell Sefcovic that Brussels’ latest move in ongoing trade talks fails to meet U.S. expectations, the FT reported.
The EU was the second-largest purchaser of U.S. exports in 2022, taking in nearly $351 billion of American goods, according to the Office of the U.S. Trade Representative.
The EU’s main executive body, the European Commission, declined CNBC’s request for comment on Trump’s new tariff threat.
Trump has long accused Europe of taking unfair advantage of the U.S. through trade. He announced a blanket 20% tariff on the EU on April 2 as part of his “reciprocal” tariff plan, though he quickly revised that duty down to 10% for 90 days.
Europe is also dealing with Trump’s sector-specific tariffs, including a 25% levy on all steel and aluminum imports.
“To go to 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,” Chicago Fed President Austan Goolsbee said Friday morning on CNBC’s “Squawk Box.”
“If they’re putting in place tariffs that have a stagflationary impact, which is to say they slowed down output by raising the cost of production while also raising prices, then that’s the Central Bank’s worst situation,” Goolsbee said.
— CNBC’s Ruxandra Iordache and Laya Neelakandan contributed to this report.
trump-calls-for-50-tariff-on-european-union-starting-june-1
Leave a Reply