Trump Threatens Heavy Taxes on EU and Smartphones to Push Manufacturing Back to America
On May 23, President Trump reignited global trade tensions by publicly threatening to impose tariffs as high as 50% on EU imports and plans to levy a 25% tax on all iPhones and other brand smartphones manufactured overseas and sold in the U.S. His aim is to push U.S. manufacturing back home and counter what he perceives as unfair trade policies.
Trump stated on social media that the EU is "very tough" in trade negotiations, and due to a lack of progress, he plans to increase tariffs on EU goods by 50% starting June 1. He directly told Apple CEO Tim Cook that future iPhones sold in the U.S. must be manufactured domestically and cannot be assembled in India or other regions; otherwise, Apple would incur at least a 25% tax.
He also emphasized that this new tax would extend to Samsung and other companies manufacturing smartphones overseas, asserting that it would be "unfair to target only one company." The White House indicated that this move aims to ramp up pressure on U.S. executives to establish factories back in America while punishing allies that Trump believes engage in unfair trading practices.
As for comments from Apple and the EU, both have yet to respond to this situation. European officials have indicated recent breakthroughs in bilateral trade negotiations but acknowledged significant disagreements over sensitive issues like VAT, reiterating that they cannot yield on existing VAT regulations.
The U.S. Treasury Secretary Scott Bessent has criticized the EU during a recent media appearance, claiming that "most countries are negotiating in good faith except the EU," stressing that U.S.-EU trade talks have stalled without progress. Meanwhile, as the newest tariff measures from the U.S. were reported, European Trade Commissioner Maroš Šefčovič quickly held emergency phone calls with U.S. trade representatives and ministers.
Trump's tax threats might alter the landscape of global tech supply chains significantly if they come into effect, impacting not only Apple but also several smartphone brands based in Asia.
