Market Turbulence: Trump's Intensified Trade Warnings Impact EU and Apple

By Philip Blenkinsop, David Lawder, and Stephanie van den Berg

BRUSSELS/BANFF, Canada/TEH HAGUE, May 23 (Reuters) – U.S. President Donald Trump has once again stirred the pot in international trade by threatening a hefty 50% tariff on European Union imports starting June 1. He also hinted at a potential 25% tax on iPhones sold to American consumers,sending shockwaves through global markets that had just begun to stabilize after weeks of relative calm.

The S&P 500 dropped by 1%,while the Nasdaq and European stocks fell by approximately 1.2% and 1.5%, respectively. Trump’s aggressive stance towards the EU stems from frustrations over stalled negotiations; though, it also signals a return to his unpredictable trade tactics that have left businesses and consumers anxious about an impending economic downturn.

In targeting Apple specifically,Trump is continuing his trend of pressuring major corporations to shift production back to U.S. soil—a strategy he previously applied to automakers and tech firms alike.Yet it’s certainly worth noting that the U.S. currently lacks any smartphone manufacturing capabilities despite Americans purchasing over 60 million devices each year; relocating production could inflate iPhone prices substantially.

Market analyst Fawad Razaqzada remarked on how quickly optimism can evaporate in these situations: “All the positivity surrounding trade deals vanished in mere moments.”

U.S. Treasury Secretary Scott Bessent expressed hope that Trump’s threats would spur action from EU leaders during an interview with Fox News, suggesting they need motivation for more serious negotiations.Trump took to Truth Social stating: “The European Union was created primarily for exploiting America through TRADE,” emphasizing his frustration with what he perceives as unproductive discussions.

While the European Commission opted not to respond immediately—waiting instead for a scheduled call between EU Trade Chief Maros Sefcovic and U.S counterpart Jamieson Greer—EU representatives were set to convene later in Brussels regarding trade matters.Dutch Prime Minister Dick Schoof voiced support for the EU’s approach during discussions with reporters in The Hague, indicating this latest threat might be part of ongoing negotiations rather than an outright declaration of war on trade relations: “We’ve seen tariffs fluctuate before during talks with the U.S.”

After significant sell-offs earlier this month prompted a pause on many tariffs announced by Trump against various nations—including reducing punitive measures against China—the current climate remains tense as investors remain wary of further escalations.

Citigroup’s global chief economist Nathan Sheets shared concerns about reaching agreements with Europe specifically: “I’m optimistic we’ll find common ground eventually but remain apprehensive about our dealings with the EU.” A potential levy could hike prices across numerous products—from German automobiles to Italian delicacies like olive oil—with last year’s exports from Europe totaling around €500 billion ($566 billion).as finance leaders gathered at a recent G7 summit amidst stunning Canadian landscapes, they attempted downplaying tariff disputes while acknowledging rising tensions between Trump and EU officials may prolong conflicts ahead.

kathleen Brooks from XTB noted how Trump’s strained relationships within Europe heighten risks associated with extended trade wars—especially affecting shares tied closely to luxury brands or automotive manufacturers who are notably vulnerable under such conditions.

Volvo Cars CEO Hakan Samuelsson warned customers might bear much of any cost increases due directly related tariffs; he even suggested importing smaller models into America could become unfeasible altogether but remained hopeful for resolution soon: “It wouldn’t benefit either side if we halted trading.”

Apple chose not comment publicly regarding Trump’s threats which would reverse previous exemptions granted mainly benefiting tech companies selling consumer electronics imported largely from china—resulting in their stock dipping by around 2.5%.

In another post directed at Apple CEO Tim Cook via Truth Social platform Friday morning , trump reiterated expectations that iPhones sold domestically should be manufactured within American borders—not elsewhere like India or other countries without elaborating further details .

experts caution imposing company-specific tariffs may face legal challenges since there’s no clear authority allowing such actions without extensive investigations akin anti-dumping cases .

Apple is already accelerating plans aimed at producing most iPhones sold stateside within Indian factories before end-2026 due anticipated higher costs stemming from Chinese imports . However , shifting all production back home seems unlikely anytime soon ; earlier this year Apple announced intentions invest $500 billion across nine states—but those funds weren’t earmarked solely towards relocating phone assembly operations .

Analyst Gil Luria remarked : “It’s hard envisioning full compliance requested by president occurring next three-to-five years.”

(Reporting contributions include Philip Blenkinsop (Brussels), Akash Sriram (Bengaluru), David Lawder (Banff); additional insights provided by Reinhard Becker et al.; writing credits go Joseph Ax & David Gaffen; editing handled Shilpi Majumdar et al.)

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