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Image Caption: President Donald Trump addresses the nation from the Oval Office in the White House, on the day he signs an executive order, May 23, 2025. — Reuters
- Trump Threatens 25% Tariff on iPhones Not Made in the U.S.
- U.S. and European Stocks Decline; Dollar Weakens While Gold Prices Rise
- Apple’s U.S. Investment Plans Do Not Include iPhone Assembly
On Friday, President Donald Trump escalated trade tensions once again, proposing a steep 50% tariff on goods from the European Union slated to take effect on June 1. He also warned Apple about a potential 25% tariff on all imported iPhones purchased by consumers in the U.S.
These alarming announcements, made via social media, sent shockwaves through global markets that had recently seen a period of relative calm. Major stock indices in the U.S. and Europe dropped, the dollar weakened, and gold prices—often viewed as a safe haven—rose. Concerns about tariffs negatively impacting economic growth caused U.S. Treasury yields to fall.
Trump’s harsh stance towards the EU stemmed from perceived slow progress in negotiations with the bloc. This marked a troubling return to a back-and-forth trade conflict that has unnerved markets, businesses, and consumers while raising concerns about a possible global recession.
His remarks regarding Apple are part of a broader pattern aimed at convincing companies to shift production closer to home, a strategy that has previously targeted automakers, pharmaceutical firms, and semiconductor manufacturers. However, the reality is that the U.S. does not manufacture smartphones in large quantities, even as consumers purchase over 60 million phones annually. Transitioning production to the U.S. could significantly hike iPhone prices.
Later that day, Trump elaborated to reporters, mentioning that the proposed tariff would impact "Samsung and anyone else making that product," which he seemed to refer to smartphones. He indicated that this new tariff could be implemented by the end of June.
Reiterating his grievances, Trump claimed the European Union treats the U.S. unfairly by restricting American car sales in their market. "It’s time we play the game my way," he stated.
When pressed on whether he anticipated a deal before the June 1 deadline, Trump asserted, "We’re not in the market for deals. The tariff is set at 50%. But they won’t face tariffs if they build their factories here."
EU Trade Chief Maros Sefcovic conveyed that the European Commission is committed to reaching a mutually beneficial agreement, emphasizing that EU-U.S. trade negotiations should be predicated on respect, not intimidation, following a phone call with U.S. Commerce Secretary Howard Lutnick.
Dutch Prime Minister Dick Schoof expressed support for the EU’s trade approach during a press conference, suggesting that the latest developments were expected as part of ongoing negotiations. "We’ve witnessed tariff fluctuations before in talks with the U.S.," he remarked.
The White House had previously paused most punitive tariffs Trump proposed in early April, which had led to a significant sell-off in U.S. assets, including government bonds and the dollar. Trump maintained a 10% baseline tax on most imports and reduced a previously huge 145% tax on Chinese goods down to 30%.
A 50% tariff on EU imports could result in higher prices for a wide range of products, from German cars to Italian olive oil.
In the previous year, EU exports to the U.S. reached approximately €500 billion ($566 billion), with Germany leading at €161 billion, followed by Ireland at €72 billion, and Italy at €65 billion. These exports included pharmaceuticals, cars, auto parts, chemicals, and aircraft, according to EU statistics.
Disputes Over Tariffs
Negotiations between the U.S. and various countries have been rocky at best. Finance officials from the G7 industrialized nations attempted to ease tensions surrounding tariffs during a recent forum in Canada.
Kathleen Brooks, a research director at XTB, noted that the EU seems to be among Trump’s least favored regions, suggesting that strained relations with its leaders increase the probability of a prolonged trade conflict.
Discussions with Japan appeared to be less contentious, as Japan’s chief trade negotiator, Ryosei Akazawa, described the talks as more candid and comprehensive than in the past.
While expressing hope for an agreement during an upcoming meeting between Trump and Japanese Prime Minister Shigeru Ishiba, Akazawa emphasized that they wouldn’t rush to finalize a deal, stating, "Our national interests must be protected."
U.S. Treasury Secretary Scott Bessent remained tight-lipped about potential trade agreements but indicated that more would be announced as the 90-day pause on reciprocal tariffs approaches its end in July.
Apple declined to comment on Trump’s tariff threat, which would reverse previously granted exclusions for smartphones and other electronics imported mainly from China—an important concession for major tech companies.
Following Trump’s statement, Apple’s stock dipped by 3%. Trump mentioned in an early post on Truth Social that he had previously told CEO Tim Cook that he expected iPhones sold in the U.S. to be manufactured domestically rather than in India or other locations.
Cook and Trump had met earlier in the week, according to a source familiar with the discussion. Apple has been working to expedite plans for most iPhones sold in the U.S. to be produced in India by the end of 2026 in anticipation of rising tariffs from China.
However, the feasibility of relocating production to the U.S. remains low. In February, Apple announced a commitment to invest $500 billion over four years across nine American states, but this commitment did not include U.S.-based iPhone manufacturing.
"It’s hard to envision that Apple can fully comply with the president’s request within the next 3 to 5 years," commented Gil Luria, an analyst at DA Davidson and Co.
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