Tariffs are back: Trump threatens 25% tariff on Apple and 50% on European Union

Tariff tantrums are back in trade after a brief pause in the first few weeks of May. US President Donald Trump threatened Apple with imposing 25% tariffs on iPhones made outside the U.S.

He posted on the social media platform, Truth Social, saying, “ 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 United States, not India, or anyplace else.” He further added, if that's not the case, then a tariff of at least 25% must be paid by Apple to the US.

This comes after President Trump earlier said that he wished iPhones were not made in India. During an event in Doha, Qatar, on May 15, Trump recounted a conversation with Tim Cook, saying, “ I had a little problem with Tim Cook yesterday. I said to him, My friend, I treated you very good. You’re coming here with $500 billion, but now I hear you’re building all over India. I don't want you building in India". However, according to media reports, Apple has reassured the government of India on building major portions of its products in India.

Apple’s supplier, Foxconn, recently invested $1.5 billion in India to expand its capacities and presence outside China. The company also invested $2.56 billion in Karnataka’s Devanahalli facility.

The news comes at a critical juncture when trade deal talks with India are in the final stages. However, India’s appeal to impose reciprocal tariffs on US steel imports may have created hindrances between the two.

Apart from this, Trump also announced a 50% tariff on the European Union, claiming the trade talks with the EU are going nowhere. He said the US has a deficit of $250 million a year with the European Union, which is "totally unacceptable".

Following the announcement, European indices tumbled more than 2% across the board. The European benchmark Euro Stoxx index fell 2.6%, Germany's Dax fell, 2.4% and France's CAC40 fell 2.7% at 6:15 pm on Friday. The US stock market futures of NASDAQ crashed 400 points, Dow Jones futures are down by 1.34%