The European Commission has asked the United States for an explanation after President Donald Trump yesterday recommended imposing a 50% tariff on goods from the European Union from June 1, with some European officials seeing the threat as a negotiating tactic.
European stock markets fell sharply on Friday after Trump stepped up threats to impose tariffs on the EU and tech giant Apple, reigniting fears of a damaging global trade war.
Trump has said he is recommending a 50% direct tariff on EU goods starting June 1, which would lead to high levies on luxury goods, pharmaceuticals and other goods. He has also threatened Apple with a 25% tariff on all iPhones sold but not manufactured in the US.
"All the optimism about trade deals disappeared in a matter of minutes, even seconds," said Fawad Razakzada, a market analyst at City Index.
US Treasury Secretary Scott Besant told Fox News yesterday that he hopes the new threat will "light a fire under the EU", adding that other countries have negotiated with Washington in good faith.
“The European Union, which was founded primarily to take advantage of the United States on trade, has been very difficult to work with,” Trump wrote on his Truth Social platform. “Our discussions with them are going nowhere!”
Holger Schmieding, chief economist at Berenberg, said that “with Trump you never know, but this would be a major escalation.” “The EU would have to respond and that would be something that would really hurt both the American and European economies.”
The threat of tariffs comes as negotiations are at a standstill, with Washington seeking unilateral concessions from Brussels to open up the market to American companies, while the EU seeks to reach a deal that would benefit both sides, sources familiar with the matter told Reuters.
Some see Trump's threat as a negotiating tactic. "Trump presented the 50% tariff as another step in the ongoing trade negotiations between the EU and the US," Poland's Deputy Economy Minister Michal Baranowski told reporters yesterday.
"I am confident that we will reach a good agreement. I see this as another step in our negotiations which, I sincerely hope, will ultimately result in a good agreement that will be balanced and fair for both sides," he said.
Dutch Prime Minister Dick Schoff said the EU would stay on the path it had chosen. "We have seen that tariffs can go up and down during negotiations with the US," he told reporters in The Hague.
The EU already faces US import tariffs of 25% on steel, aluminium and cars, as well as so-called “reciprocal” tariffs of 10% on almost all other goods - a levy that is set to increase to 20% when Trump’s 90-day reprieve expires on July 8.
French Trade Minister Laurent Saint-Martin said Trump's new threats were not helping the negotiations at all. "We remain on the same course: de-escalation, but we are ready to respond," he wrote on the X network.
Italian Foreign Minister Antonio Tajani told Italian news agency ANSA that the goal remains "zero for zero" on tariffs.
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