'Discussions going nowhere': Trump threatens 50% tariff on EU goods starting June 1

After issuing a tariff threat to Apple for manufacturing iPhones outside the US, President Donald Trump launched a scathing attack on the European Union, accusing it of systematically exploiting the United States through unfair trade practices and threatening to impose a sweeping 50% tariff on EU products starting June 1, 2025.

Trump claimed the EU was “formed for the primary purpose of taking advantage of the United States on trade,” citing a laundry list of grievances - from Value-Added Taxes (VAT) and corporate penalties to trade barriers and what he called “monetary manipulations.”

According to Trump, these policies have contributed to a US-EU trade deficit exceeding $250 billion annually, which he labeled as “totally unacceptable.”

“Our discussions with them are going nowhere,” Trump wrote. “Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States.”

Trump's sharp remarks not only reflect his hardline protectionist rhetoric, but also signal a potentially dramatic escalation in US-EU trade tensions.

A 50% blanket tariff would affect a wide range of imports, from automobiles and luxury goods to pharmaceuticals and machinery, potentially triggering retaliatory measures from the European Union.

Trump’s tariff threat also rattled financial markets, especially in Europe. Government bonds, which investors typically rush to during times of uncertainty, saw a surge in demand, causing their yields to drop.

Germany’s 10-year bond yield, considered the Euro Zone’s benchmark, fell sharply by 8 basis points. French and Italian bonds also saw declines, while Swiss bond yields dropped the most, by 12 basis points.