On Friday, May 23 in the morning, President Donald Trump threatened to restore his global commercial wars, and added a new dose of chaos to commercial relations that had calmed down a bit in recent weeks.
The US president had focused his attention on a trip to the Middle East and a fiscal bill in the Capitol. But on Friday, Trump returned to tariffs: he said he would apply a strong European export tax within a little more than a week and warned Apple that their iPhones, which are manufactured outside the United States, would face a 25%tariff.
The threats caused the collapse of the actions and revived the risks for the world economy, as they have done in recent months other similar ads of the president. To promulgate, economists said tariffs would mean significant costs for Apple, one of the most valuable companies in the world, and would break the United States trade with the European Union, the largest commercial relationship in the world according to some measures.
On Friday morning, the president wrote in Truth Social that conversations with the European Union “are not going anywhere” and recommends a 50% tariff on European imports from June 1.
“The European Union, which formed with the main purpose of taking advantage of the United States in commerce, has been very difficult to negotiate,” Trump wrote. He said that commercial barriers, taxes, sanctions to companies and other policies in the block had contributed to a commercial imbalance with the United States “totally unacceptable.”
In a previous publication on social networks, the president also attacked Tim Cook, Executive Director of Apple, who visited Trump at the White House last week. The president wrote that the iPhones sold in the United States should “be manufactured and built in the United States, not in India or anywhere else.”
On Friday afternoon, Trump told journalists in the oval office that the 25% tariff on iPhones could limit not only Apple, but also Samsung or any other cell phone company that manufactures its product outside the United States. He said that, otherwise, it would not be fair. He added that the tariffs would begin “I suppose that at the end of June.”
The president also denied that he was looking for an agreement with Europe. When asked if Europe could do something to avoid tariffs, he replied: “I don’t know, let’s see what happens.”
“They have treated us very badly over the years,” he added.
The president continued to say: “I just said it, it is time for us to play in the way I know how to play.”
The US markets opened with strong decreases, and the S&P 500 index fell more than 1 percent at the beginning of operations, before finishing the day with a fall of less than 1%. Apple shares fell around 3 percent. In Europe, the actions of car manufacturers were the most affected. Stellantis and Mercedes-Benz shares fell around 4.5 percent, and Volkswagen and Porsche dropped more than 3%.
Estimates of the Kiel Institute for the World Economy, a German Institute for Economic Research, showed that tariffs would cause a 20% drop in European Union to the United States in the short term, as well as an increase of more than 6% in prices in the United States.
Austan Goolsbee, president of the Bank of the Federal Reserve of Chicago, warned Friday at the CNBC that the proposed import taxes raised the risk of higher prices and lower growth, and described them as “really scary for the supply chain.”
Goolsbee added that uncertainty had made it difficult for companies to continue to invest. Citing an executive director of a construction company with which the Federal Reserve spoke recently, he said: “Now we are at a time ‘stop writing'”.
“If every week, every day there will be a new important announcement, they simply cannot take action until some of those things are resolved,” he said.
Trump announced tariffs again and again in his first 100 days, only to suspend some of the encumbrances last month and try to negotiate commercial agreements with other governments. Its approach has led to volatility in world financial markets and has caused uncertainty among companies that depend on trade.
The Trump government has held commercial conversations with more than a dozen governments, including the European Union, to try to reach some commercial agreement before many tariffs return to force in early July. But some foreign officials claim that Trump’s government has not made clear their demands and that they doubt in making great concessions when Trump could impose tariffs at any time.
Speaking to Fox News on Friday, Treasury secretary, Scott Besent, said Europe’s commercial offers “had not been of the same quality” as those that the United States had received from other countries and expected the president’s threats to “turn on a heat under the EU.”
The Commissioner of Commerce of the European Union, Maros Sefcovic, was expected to maintain a call with Jamieson Greer, commercial representative of the United States. European officials declined to comment on Trump’s publications on social networks until after that call, according to a spokesman for the European Commission.
European Union officials from 27 countries have been negotiating with their American counterparts weeks, hoping to reduce a 10% tariff that Trump has applied to countries around the world and reduce or avoid sectoral tariffs that he has imposed or proposed on products such as cars and pharmaceutical products, which could be especially painful for the block.
To placate Trump, the European Union has offered to reduce tariffs on industrial products to zero, if the United States does the same, and increasing American energy purchases. Besent, who met this week in Canada with senior finance officials of the richest economies in the world, also said Friday in Fox News that the member countries that make up the European Union “do not even know what the EU is negotiating in its name.”
When the EU negotiators visited Washington a few weeks ago, they carried a sheet of conditions: a brief summary of what officials are willing to offer to speak in an attempt to ensure an agreement. The European Union had shared its leaf of conditions with representatives of the European Member States before the trip, the diplomats said.
Sabine Weyand, a high -level negotiator, and other European commercial officials have recently visited Washington to negotiate with their American counterparts. But these meetings have produced few advances and little sense of management, according to officials and diplomats of the European Union who spoke on condition of anonymity to discuss the ongoing deliberations.
European officials often care about not having a clear idea of what their American counterparts want, or who has a decision -making power within the Trump government, apart from the president.
Amid the slow advances, the European Union has continued to prepare countermeasures that would counteract with higher tariffs on a series of American products, such as machinery, clothing, soybeans and, potentially, Bourbon. The objective has been to incite the United States to negotiate, but the strategy has won the few fans in Washington.
Howard Lutnick, secretary of Commerce and one of the main contacts of the block in Washington, described the European Union as one of the governments with which it has been difficult to negotiate.
“There are countries that are impossible, such as the European Union,” Lutnick said Thursday at an event organized by Axios. “It’s very difficult.”
In another interview on Thursday night in Newsnation, Lutnick praised Trump’s negotiation strategy: “The world functions as Donald Trump believes that he will work. And whoever bets against Donald Trump will feel the pain of making mistakes.”
“Look, the president knows the art of negotiating,” Lutnick said, added: “They will no longer scam us.”
Trump’s aggressive approach could have other economic effects, as foreign leaders try to diversify their commercial ties beyond the United States. Hours before Trump threatened to drastically increase tariffs on Europe, Xi Jinping, the president of China, maintained a phone call with Friedrich Merz, the Chancellor of Germany, thus continuing the recent Beijing efforts to persuade European governments and get away from Washington.
XI offered China as a reliable economic partner to Germany and the European Union, and said that both parties should continue to expand cooperation in areas such as automotive, machinery and chemicals, as well as advanced technology.
Trump’s threats early in the morning of Friday were also aimed at one of the most valuable companies in the United States, which has seen the price of their shares with the president’s commercial plans. In four days in early April, after Trump announced tariffs of up to 145 percent on products made in China, Apple lost US $ 770 billion market value. But in the following month, its value rebounded to exceed 3 billion dollars.
Apple has promised to spend more than US $ 500 billion in the United States in the next four years. Much of that money was already planned to spend it in the country, but Apple has said that it will buy 19 billion artificial intelligence chips manufactured in the United States and that it will begin to manufacture artificial intelligence servers in Houston.
However, the company said nothing about the production of iPhones, iPads or Macs in the United States, which has become a delicate point with Trump. Some analysts have estimated that moving the manufacture to the United States could far duplicate the consumer price of an iPhone.
Trump said Friday that Apple had been building factories in India, and that he had told Cook that the company should expect to face tariffs when selling in the United States. “I had an agreement with Tim that I wouldn’t,” said the president.
In China, Apple and its component suppliers are grouped around mounting plants longer than football fields. Thousands of engineers and other employees who work for Foxconn, one of the main suppliers, and other companies live closely, often in bedrooms. It is an interconnected logistics infrastructure that has been built over the years and that would be incredibly difficult, if not impossible, reproduce in the United States.
Apple has said that people from more than 50 countries and regions contribute to manufacture their products. Airpods and Apple Watch are assembled in Vietnam. Some imac are manufactured in Ireland. The components are manufactured in China.
A few years ago, Apple assembled almost all iPhone in China, but has gradually transferred production outside the country as commercial tensions and costs increase. At the end of this year, it is estimated that 25% or more of the iPhone will be manufactured in India.