U.S. President Donald Trump has proposed a sweeping 50% tariff on all goods imported from the European Union, marking a dramatic escalation in the ongoing trade disputes. Announcing the move on his Truth Social account, Trump cited frustration with stalled trade negotiations, accusing Brussels of being “very difficult to deal with.” The new duty, if enacted, would take effect on June 1, 2025.

Trump claims the European Union was “formed for the primary purpose of taking advantage of the United States on trade,” pointing to what he described as a long list of unfair practices - among them, “powerful trade barriers,” VAT taxes, “ridiculous” corporate penalties, and lawsuits against U.S. firms. He stated that the transatlantic discussions were failing to produce results, and therefore he was recommending the flat 50% tariff. He clarified that no such tax would apply to products made or assembled within the United States.

Brussels has so far refrained from officially responding, with EU officials expected to issue a statement following a scheduled high-level call between American and European trade representatives. Meanwhile, the threat of such a dramatic tariff hike has already sent shockwaves through financial markets.

European stock indexes took a hit following the president’s announcement. The FTSE 100 dropped by over 1.2%, while Germany’s DAX and France’s CAC 40 both lost more than 2%. U.S. stock futures also pointed downward, indicating that Wall Street was bracing for similar losses. In commodities, Brent crude oil prices fell by more than 1%, trading around $63 per barrel. Currency markets responded as well, with the dollar softening and the pound reaching lows not seen since early 2022. The instability also fed into concerns over U.S. debt, which had already been weighing on investor sentiment throughout the week.

This isn’t the first time Trump has turned to tariffs as a negotiating tactic. Earlier this month, he reduced duties on Chinese goods to 30% in an effort to advance talks with Beijing. The contrast with his approach to the EU - now facing an even higher proposed tariff - reflects his view that the European bloc is more resistant to U.S. demands.

In a related development, Trump also directed his attention to Apple, threatening a 25% tariff on iPhones unless the company relocates all production to the U.S. He reiterated his position that iPhones sold in America should be made domestically, not in India or elsewhere. “If that is not the case, a tariff of at least 25% must be paid by Apple to the U.S.,” he wrote. Apple, which has been shifting its supply chains toward India amid rising tensions with China, saw its stock fall more than 2% in premarket trading after the warning.

The backdrop to this warning includes reports from the Financial Times that Apple supplier Foxconn plans to expand manufacturing operations in India. A new facility is reportedly being planned in the Tamil Nadu region, reinforcing Apple’s pivot to South Asia in response to trade headwinds.