President Donald Trump escalated trade tensions on Friday by recommending a sweeping 50% tariff on all goods imported from the European Union, set to take effect June 1, 2025. Trump’s announcement, delivered via his Truth Social platform, cited persistent frustrations with stalled trade negotiations and what he described as unfair EU trade practices. He accused the EU of imposing formidable trade barriers, excessive VAT taxes, and “unjustified lawsuits against American companies,” resulting in a trade deficit exceeding $250 billion annually.

The immediate market reaction was sharp: European stock markets tumbled, with German and French indices dropping by 2% and UK shares sliding by over 1%. U.S. markets also felt the impact, as Dow futures fell more than 500 points and S&P futures dipped by 1%. The EU, America’s second-largest trading partner, exported approximately $550 billion in goods to the U.S. last year. Trump’s move marked a significant escalation from earlier tariffs, which had targeted EU cars, steel, and aluminum at lower rates.

Trump’s tariff threats extend beyond Europe. Apple, which manufactures the majority of its iPhones in China, faces the prospect of steep price hikes if current and proposed tariffs remain. Analysts warn that iPhone prices could rise by 30% to 43%, potentially pushing the entry-level iPhone 16 from $799 to over $1,100, and the high-end iPhone 16 Pro Max to nearly $2,300. Apple’s stock has already suffered, dropping more than 8% following these tariff announcements, and analysts believe the company may struggle to pass the full cost to consumers.

Despite efforts to diversify its supply chain to countries like Vietnam and India, Apple remains heavily reliant on manufacturing outside the U.S., with those regions also facing substantial tariffs. Trump has repeatedly urged Apple to relocate more production to the United States, but analysts say such a shift would require years and billions in investment, making it an unlikely near-term solution.