Today, May 23, 2025, President Donald Trump has announced new threats of significant tariffs. These threats have caused a drop in global markets and have raised concerns in the world economy.
Here are the key points:
* Threat to the European Union (EU): Trump has stated that he is "recommending" a direct tariff of 50% on all goods from the European Union imported to the United States, starting June 1, 2025. He claims that negotiations with the EU are "going nowhere" and that there are "trade barriers, VAT taxes, ridiculous corporate penalties, non-monetary trade barriers, currency manipulations, and unjustified lawsuits" by the EU. He has pointed out that there will be no tariff if the product is made in the United States.
* Threat to Apple and iPhone manufacturing: Trump has also threatened to impose a tariff of at least 25% on Apple products unless the company moves the manufacturing of its iPhones to the United States. He has expressed that he informed Tim Cook (CEO of Apple) some time ago that he expects iPhones sold in the U.S. to be made there and not in India or anywhere else.
* Impact on markets: After weeks of some de-escalation in tariff threats, these new announcements have caused a drop in S&P 500 and Dow Jones Industrial Average futures, as well as a decline in oil prices and an increase in Treasury bond yields. Apple shares have also fallen.
* Context of current and previous tariffs:
* Currently, the average effective tariff in the U.S. is nearly 18%, the highest level since 1934.
* In April 2025, Trump had announced 10% tariffs for most countries and higher "reciprocal" rates (from 11% to 50%) for countries with large trade deficits, although many of these were suspended for 90 days (until July 8, 2025) for most countries, except China.
* 25% tariffs on imported steel and aluminum, as well as on cars and automotive parts, remain in effect.
* There has been an agreement with China to temporarily reduce mutual tariffs for 90 days, with a baseline tariff of 10% maintained by both.
* Trump's proposals for a possible second term: During his campaign, Trump has promised even higher tariffs, including:
* 60% on China.
* 100% on Mexico.
* 20% on all other countries.
* He has also proposed tariffs to penalize American companies that outsource manufacturing.
Overall, Trump's tariff threats continue to be a factor of global economic uncertainty, with the potential to raise prices for consumers, reduce GDP, and provoke retaliation from trading partners.