Stock markets were down in early trading on Friday after President Donald Trump said he wanted to impose a 50-percent tariff on the European Union and a new 25-percent tariff on iPhone maker Apple.

The S&P 500 was down around 0.8 percent, the Nasdaq Composite down 1.0 percent, and the Dow Jones Industrial Average by 0.6 percent as of 10:40 ET. Apple stock, meanwhile, had fallen 2.3 percent.

This came following a Truth Social post from Trump in which he announced plans to recommend a 50-percent tariff on the bloc starting June 1. Minutes earlier, the president expressed frustration with Apple CEO Tim Cook, writing that he expects iPhones sold in the U.S. to be “built in the United States, not India, or anyplace else.”

A spokesperson for the European Commission told Newsweek it would not comment until after a call later on Friday between the EU trade chief, Maroš Šefčovič, and U.S. Trade Representative Jamieson Greer.

Newsweek reached out to Apple and the White House for comment via email.

Why It Matters

Concerns over the potentially damaging impacts of Trump’s tariffs on the U.S. and global economies had been allayed in recent weeks by his reciprocal tariff pause on April 9, positive rhetoric from the administration on potential trade deals, and the May 12 announcement that the U.S. and China would temporarily reduce the staggering tariff rates applied to each other’s imports.

However, Trump’s latest announcement marks an escalation in the dispute with the EU, one of America’s largest trading partners, which Trump had previously accused of being designed to “screw” the U.S. Total goods trade between the pair reached just under $1 trillion in 2024, according to the U.S. Trade Representative’s Office.

What To Know

Before markets opened, Trump complained in his post to Truth Social that the EU had been “very difficult to deal with” and described the current U.S. trade deficit with the union as “totally unacceptable.” The president said that the trade deficit had grown to “more than $250,000,000 a year,” higher than the official figure provided by the Office of the U.S. Trade Representative for 2024, $235.6 billion.

“Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025,” Trump wrote, adding that there will be no tariff for products “built or manufactured in the United States.”

Trump hit the EU with a 20-percent “reciprocal” tariff during his “Liberation Day” speech on April 2, but lowered this to the baseline rate of 10 percent days later. The EU responded by pausing its own retaliatory tariffs on US goods for 90 days, which European Commission President Ursula von der Leyen said would “give negotiations a chance.”

In mid-May, EU diplomats told Politico that the U.S. had made contact to indicate its willingness to enter negotiations, though no concrete progress toward a trade deal has been announced.

A week prior, the European Commission had drafted a list of “potential countermeasures” which it said would impact €95 billion ($108 billion) worth of U.S. goods, and would be deployed “if ongoing EU-US negotiations do not result in a mutually beneficial outcome and the removal of the US tariffs.”

In his post on Friday, Trump cited trade barriers and VAT taxes among his motivations for the new tariff, as well as what he said were “unfair and unjustified lawsuits against American Companies,” an apparent reference to the fines imposed by the EU on Meta and Apple last month for violations of its digital market rules.

European stocks plunged following Trump’s announcement on Friday, but losses tempered toward the end of trading. The Euro Stoxx 50 closed down 1.9 percent, while the Stoxx Europe 600 dropped 1 percent.

Before this, the president warned Apple CEO Tim Cook that if the company fails to build its iPhones in the U.S., it will be subject to its own 25 percent tariff.

“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S. Thank your for your attention to this matter!”

What People Are Saying

President Donald Trump, Friday on Truth Social: “The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with. Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable.”

Economist and professor of international trade at McMaster University, Pau Pujolàs told Newsweek that some of what Trump said concerning the EU’s trade barriers was true, but that his comments about the “totally unacceptable” trade deficit with the bloc were “directly nonsense.”

“Having a trade deficit is not ‘totally unacceptable;’ it is just a fact, as much as me running a tremendous trade deficit with Costco every year is just a fact—that greatly improves my family’s economic wellbeing.”

He added that a 50-percent tariff on EU goods “would be a bad thing mostly for the U.S. (and a bit for the EU). U.S. importers and consumers will suffer greatly.”

Kevin O’Marah, chief research officer at supply chain consultancy Zero100, told Newsweek that the 25-percent tariff on Apple “will mean higher prices—probably ~$100 more per iPhone.”

“It will only dampen sales marginally because the iPhone is a must-have item. No one will quit their iPhone, but some will delay the upgrade to new model.”

What Happens Next

Trump said he would be “recommending” the 50 percent tariff on EU products. The White House has not yet confirmed whether this will take effect.

Update 05/23/25, 11:32 a.m. ET: This article was updated with comment from Kevin O’Marah.