Trump’s Tariff Threats on EU, Apple Trigger Renewed Market Jitters — Evening Brief – 05.23.25
President Donald Trump announced via social media that he will recommend a 50% tariff on the European Union, effective June 1, citing frustration over stalled trade negotiations. Additionally, he threatened a 25% tariff on iPhones not made in the U.S., sending Apple stock tumbling $10 to $193, wiping out tens of billions in market value. The announcement triggered a broader market reaction, dragging down U.S. Treasury yields, the euro, European stocks, crude oil, and bitcoin, underscoring the global reach of his renewed tariff threats.
As markets attempt to digest renewed trade threats and fiscal uncertainty, Trump’s latest posts reinforce a now-familiar reality: U.S. policy shocks can swiftly reshape global financial dynamics with little warning.
Trump’s statement accused the EU of imposing unfair trade barriers, VAT taxes, and corporate penalties, arguing that these policies have contributed to an unacceptable $250 billion trade deficit with the U.S. His shift in tone raises concerns over potentially abrupt policy changes that could disrupt market stability.
“It’s going to keep markets on edge,” said Aneeka Gupta, head of macroeconomic research at Wisdom Tree UK Ltd. “Markets were hoping news on tariffs had abated until at least the 90-day pause expired, but that’s clearly not the case. Uncertainties are here to stay. We’re in for a period of very high volatility.”
The proposed tariffs could exacerbate U.S.-EU trade tensions, potentially disrupting supply chains and increasing costs for consumers and businesses. For Apple, the iPhone tariff threat may accelerate efforts to diversify manufacturing but could also raise prices and dent profitability in the near term.
The sudden announcement disrupted recent market optimism. Investors had grown hopeful that Trump would maintain a more measured approach following a temporary pause in tariff escalation. Instead, the abrupt shift reignited fears of policy unpredictability.
Adding to market anxiety is growing concern over U.S. fiscal credibility. Trump’s tariff salvo came just days after Moody’s downgraded the U.S. credit rating, and the House passed a tax bill expected to significantly expand the national debt.