US President Donald Trump continued his tariff war on Friday, this time threatening Apple and the EU with 25 per cent and 50 per cent tariffs, respectively, in an apparent act of frustration over discussions with them.
California-based Apple plans to shift its iPhone production from China to India to avoid steep US tariffs. But Mr Trump said on his Truth Social platform that he told Apple chief executive Tim Cook "long ago" to manufacture the company's flagship devices in the US and not "any place else".
"If that is not the case, a tariff of at least 25 per cent must be paid by Apple to the US. Thank your for your attention to this matter," Mr Trump added.
Analysts have warned that moving iPhone production to the US – which has high labour costs and sources several components overseas – may hike prices by up to 25 per cent.
Wedbush Securities analyst Dan Ives reiterated his warning that high tariffs may "translate into iPhone prices of [about] $3,500" – a cost he had already broached last month.
"The pressure from Trump on Apple to build iPhone production in the US as we have discussed this would result in an iPhone price point that is a non-starter for Cupertino," he said on X, shortly after Mr Trump's posts.
While iPhones are, for now, exempt from US tariffs, the components used for their production are not. Apple, during its conference call after its second-quarter financial results, warned of a $900 million hit in its next three fiscal months owing to the trade war caused by the tariffs.
Mr Cook also made it clear that the company's projections are based on an assumption that the situation will not change, indicating they could get higher or lower. It remains unclear how the move to India will affect production costs.
Shares of the world's most valuable company slid by more than 3 per cent in premarket trading after Mr Trump's post. Major US and European stocks also fell.
Shortly after the post about Apple, Mr Trump took aim at the EU, which he said was taking advantage of the US in trade and was "very difficult to deal with".
The 27-nation bloc's "powerful trade barriers, VAT taxes, ridiculous corporate penalties, non-monetary trade barriers, monetary manipulations, unfair and unjustified lawsuits against American companies ... Our discussions with them are going nowhere", the President said.
"Therefore, I am recommending a straight 50 per cent 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. Thank you for your attention to this matter."
Mr Trump's message also comes before an expected call on Friday between US Trade Representative Jamieson Greer and European Commissioner for Trade Maros Sefcovic, and it is unclear how Mr Trump's post will affect the discussions between the officials.
Mr Trump's threat to the EU is "shaking long-term trust in US economic leadership" and could lead into a long-feared recession, said Nigel Green, chief executive of Dubai-based financial services firm deVere Group.
“This isn’t a strategic bluff – this is a destabilising threat that could do real, lasting damage. Markets are rightly alarmed. Beyond the short-term volatility, there’s a bigger risk unfolding: the risk of recession and erosion of US credibility on the global stage," he added.
The sweeping US tariffs, which were unveiled in early April, has disrupted economies, stock markets, supply chains and businesses, all of which have been caught off guard and forcing governments into the negotiating table with the world's biggest economy.
The main protagonists in the trade war are the US and China, which have imposed very high tit-for-tat levies against each other – but tensions have since simmered since they agreed to a surprise 90-day truce on May 12.
Apple has made moves to appease Mr Trump, including plans to invest at least $500 billion in the US over the next four years to bolster highly skilled manufacturing, artificial intelligence and the development of students' skills throughout the country.
That came in February well before the tariffs were announced and earned praise from Mr Trump. The President, however, seemed to be gradually running out of patience with Apple, especially after he said on May 15 that the company shouldn't be making iPhones in India and culminating in today's social media post.
The EU, meanwhile, is now facing a tariff that is more than double the reciprocal tariff of 20 per cent Mr Trump announced in April. However, he quickly suspended those levies – until July 9 – to give an opportunity for negotiations.
The EU is already dealing with a baseline 10 per cent tariff and 25 per cent on products, such as cars, aluminium and steel.
