EU Commission says it will wait for phone call between EU trade chief and his US counterpart
\n Washington
\nUS President Donald Trump threatened once again on Friday to intensify his trade war, recommending a 50% tariff on European Union goods starting June 1, and warning Apple that he may impose a 25% tariff on any iPhones manufactured outside the US.
\nThe twin threats, delivered via social media, roiled global markets after weeks of de-escalation had provided some reprieve. The S&P 500 fell 1.2% in early trading, the Nasdaq fell 1.5%, and European shares fell 1.7%.
\nShares in Germany\u2019s carmakers and luxury companies \u2014 some of the most exposed to tariffs \u2014 fell on the news. Porsche, Mercedes and BMW were down between 2% and 4.5%. Sunglasses company EssilorLuxottica was 5.5% lower.
\nShares of Apple fell 3.7% in pre-market trading, along with the shares of other technology bellwethers. Trump did not give a timeframe for his warning to Apple. More than 60 million phones are annually sold in the United States, but the country has no smartphone manufacturing.
\n\u201cThe 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,\u201d Trump wrote on his Truth Social site. \u201cOur discussions with them are going nowhere!\u201d
\nThe EU Commission on Friday declined to comment the new 50% tariff threat, saying it would wait for a phone call between EU trade chief Maros Sefcovic and his US counterpart Jamieson Greer.
\nEnvoys from the 27 EU countries are due to meet on trade in Brussels later on Friday.
\nEU\u2019s total exports last year to the United States totalled about 500 billion euros, with Germany [161 billion euros], Ireland [72 billion euros] and Italy [65 billion euros] \u2014 the three largest exporters. Pharmaceuticals, cars and auto parts, chemicals and aircraft were among the largest exports, according to EU data.
\n\u201cThe EU is one of Trump\u2019s least favorite regions, and he does not seem to have good relations with its leaders, which increases the chance of a prolonged trade war between the two,\u201d said Kathleen Brooks, research director at XTB.
\nExport-oriented car companies in Europe \u2014 most notably Germany\u2019s major automakers \u2014 are heavily exposed, with few near-term options other than smaller discounts and price increases.
\nPorsche and Volkswagen\u2019s Audi have no US production. Some, including Audi and Volvo Cars, have already said they will move some production.
\nVolvo Cars CEO Hakan Samuelsson told Reuters on Friday that customers would have to pay a large part of tariff-related cost, and that it could become impossible to import the smallest cars in the company\u2019s lineup to the United States.
\nBut he remained hopeful that Europe and the United States will soon come to an agreement.
\n\u201cI believe there will be a deal soon. It could not be in the interest of Europe or the US to shut down trade between them,\u201d Samuelsson said.
\nOptimism \u2018wiped out\u2019
\nTrump had sent markets reeling in early April after imposing tariffs on almost every inhabited local around the world, including a massive tax of about 145% on imported goods from China. Investors responded by furiously selling US assets, as the levies caused them to question the safe-haven status that America has long enjoyed, and while markets have recovered, business and consumer confidence has plunged in the United States.
\nThe shock response forced the White House to pause most tariffs through early July, leaving in place a 10% tax on most imports from other nations and 30% on most Chinese goods. But Trump held out the possibility of reviving certain levies.
\nThe White House has been in negotiations with numerous countries over trade issues, but progress has been unsteady. Finance leaders from the Group of Seven industrialised democracies tried to downplay disputes over the tariffs earlier this week at a forum in the Canadian Rocky Mountains.
\n\u201cAll the optimism over trade deals wiped out in minutes \u2014 seconds, even,\u201d wrote Fawad Razaqzada, market analyst at City Index and FOREX.com, in a note on Friday.
\nTargeting apple
\n\u201cI have long ago informed Tim Cook of Apple that I expect their iPhones, that will be sold in the United States of America, will be manufactured and built in the United States, not India, or anyplace else,\u201d Trump said in a post on Truth Social on Friday morning, referring to the Apple CEO.
\n\u201cIf that is not the case, a tariff of at least 25% must be paid by Apple to the US\u201d
\nIt is not clear whether a tariff on an individual company would face legal hurdles. Apple declined to comment on Trump\u2019s threat.
\nIn response to market upheaval, the White House had granted exclusions from steep tariffs on smartphones and some other electronics imported largely from China, a break for Apple and other tech firms that rely on imported products.
\nApple aims to make most of its iPhones sold in the United States at factories in India by the end of 2026, and is speeding up those plans to navigate potentially higher tariffs in China, its main manufacturing base, a source told Reuters.
\nBut Trump and others, including Commerce Secretary Howard Lutnick, have suggested Apple could make iPhones in the United States. In February, Apple said it will spend $500 billion over four years to expand hiring and facilities in nine American states, but it did not say the investment would go towards bringing iPhone manufacturing to the US
\nThe iPhone maker said most of its smartphones sold in the United States would originate from India in the June quarter.
\n\u201cIt is hard to imagine that Apple can be fully compliant with this request from the president in the next 3-5 years,\u201d D.A. Davidson & Co analyst Gil Luria said.<\/p>\n","protected":false},"excerpt":{"rendered":"
EU Commission says it will wait for phone call between EU trade chief and his US counterpart Washington US President Donald Trump threatened once again on Friday to intensify his trade war, recommending a 50% tariff on European Union goods starting June 1, and warning Apple that he may impose a 25% tariff on any […]<\/p>\n","protected":false},"author":2,"featured_media":480457,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-480443","post","type-post","status-publish","format-standard","has-post-thumbnail","category-world"],"yoast_head":"\n