US President Donald Trump cranked up his trade threats on Friday, targeting smartphone giant Apple and imports from the entire EU, sending the global market roiling after weeks of de-escalation provided some reprieve.
Trump threatened to impose a 25% tariff on Apple for any iPhones sold, but not manufactured, in the US. More than 60-million phones are sold in the US annually, but the country has no smartphone manufacturing.
He also said he would recommend a 50% tariff on the EU to begin on June 1, which would result in stiff levies on luxury items, pharmaceuticals and other goods produced by European manufacturers.
Markets dropped on the news. S&P 500 futures lost 1.5% in premarket activity and the Eurostoxx 600 fell 2%.
Shares of Apple fell 3.5% in premarket trading, with shares of other technology bellwethers. Trump did not give a time frame for his warning to Apple.
“All the optimism over trade deals wiped out in minutes — seconds, even,” wrote Fawad Razaqzada, market analyst at City Index and FOREX.com, in a note.
Trump roiled markets in early April after imposing tariffs on almost every inhabited locale around the world. That included a tax of about 145% on imported goods from China. Investors responded by furiously selling US assets, as the levies caused them to question the safe-haven status that America has long enjoyed, and while markets have recovered, business and consumer confidence has plunged in the US.
The shock response forced the White House to pause most tariffs until early July, leaving only in place a 10% tax on imports from other nations, but Trump held out the possibility of reviving certain levies. Friday's statements end that calm.
“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the US will be manufactured and built in the US, not India or anyplace else,” Trump said in a post on Truth Social.
“If that is not the case, a tariff of at least 25% must be paid by Apple to the US.”
The White House has been in negotiations with numerous countries over trade issues, but progress has been unsteady. Finance leaders from the G7 industrialised democracies tried to downplay disputes over the tariffs earlier in the week at a forum in the Canadian Rocky Mountains.
The EU Commission on Friday declined to comment on Trump's recommendation to put a 50% tariff on goods from the EU from June 1, saying it would wait for a phone call between EU trade chief Maros Sefcovic and his US counterpart Jamieson Greer to take place on Friday afternoon (5pm, SA time).
Shares in Germany's carmakers and luxury companies, some of the most exposed to tariffs, fell on the news. Porsche, Mercedes and BMW were down more than 4%. Sunglasses company EssilorLuxottica was 5.5% lower.
It is not clear if Trump can levy a tariff on an individual company. Apple did not immediately respond to request for comment.
After Trump's levies on China rose to more than 100% in early April, the White House backed off due to market turmoil, granting exclusions from steep tariffs on smartphones and some other electronics imported largely from China, in a break for Apple and other tech firms that rely on imported products.
Apple aims to make most of its iPhones sold in the US at factories in India by the end of 2026 and is speeding up those plans to navigate potentially higher tariffs in China, its main manufacturing base, a source told Reuters. Apple is positioning India as an alternative manufacturing base amid Trump's tariffs on China that have raised supply-chain concerns and fears of higher iPhone prices, Reuters reported last month.
But Trump and others, including commerce secretary Howard Lutnick, have suggested Apple could make iPhones in the US. In February, Apple said it will spend $500bn (R8.96-trillion) over four years to expand hiring and facilities in nine American states, but it did not say the investment would go towards bringing iPhone manufacturing to the US.
The iPhone maker said most of its smartphones sold in the US would originate from India in the June quarter.
Reuters
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