Trump Threatens New Tariffs on European Union and Apple, Reigniting Trade Fears

President Donald Trump attends a Make America Healthy Again (MAHA) Commission Event in the East Room of the White House, Thursday, May 22, 2025, in Washington. (AP Photo/Jacquelyn Martin)
President Donald Trump attends a Make America Healthy Again (MAHA) Commission Event in the East Room of the White House, Thursday, May 22, 2025, in Washington. (AP Photo/Jacquelyn Martin)
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Trump Threatens New Tariffs on European Union and Apple, Reigniting Trade Fears

President Donald Trump attends a Make America Healthy Again (MAHA) Commission Event in the East Room of the White House, Thursday, May 22, 2025, in Washington. (AP Photo/Jacquelyn Martin)
President Donald Trump attends a Make America Healthy Again (MAHA) Commission Event in the East Room of the White House, Thursday, May 22, 2025, in Washington. (AP Photo/Jacquelyn Martin)

US President Donald Trump threatened on Friday to ratchet up his trade war again, pushing for a 50% tariff on European Union goods starting June 1 and warning Apple he may slap a 25% levy on all imported iPhones bought by US consumers.
The twin threats, delivered via social media, roiled global markets after weeks of de-escalation had provided some reprieve in the tariff battle. Major US stock indexes and European shares fell and the dollar weakened, while the price of gold, a safe-haven for investors, rose. US Treasury yields fell on fears about tariffs' effect on economic growth, said Reuters.
Trump's broadside against the EU was prompted by the White House's belief that negotiations with the bloc are not progressing fast enough. His saber-rattling also marked a return to Washington's stop-and-start trade war that has shaken markets, businesses and consumers and raised fears of a global economic downturn.
And the president's attack on Apple is his latest attempt to pressure a specific company to move production to the United States, following automakers, pharmaceutical companies and chipmakers. The United States, however, does not mass-produce smartphones - even as US consumers buy more than 60 million phones annually - and moving production would likely increase the cost of iPhones by hundreds of dollars.
Later on Friday, Trump told reporters inside the Oval Office that his proposed tariff on Apple would also apply to "Samsung and anybody that makes that product," apparently referring to smartphones. He said he expected the new phone levy to be in place by the end of June.
Trump reiterated his complaint that the European Union treated the US badly and restricted the US from selling cars into the EU. "And I just said, 'It's time that we play the game the way I know how to play the game.'"
"I'm not looking for a deal," Trump said when asked whether he expected a deal before June 1. "We've set the deal – it's at 50%. But again, there's no tariff if they build their plant here."
EU trade Chief Maros Sefcovic said the European Commission, the EU's executive arm, was fully committed to securing a deal that worked for both sides, following a Friday phone call with US counterpart Jamieson Greer and US Commerce Secretary Howard Lutnick. He added that EU-US trade "must be guided by mutual respect, not threats."
Speaking to reporters in The Hague, Dutch Prime Minister Dick Schoof backed the EU's strategy in trade talks and said the EU was likely to see this latest announcement as part of the negotiations.
"We have seen before that tariffs can go up and down in talks with the US," he said.
The White House paused most of the punishing tariffs Trump announced in early April against nearly every country in the world after investors furiously sold off US assets including government bonds and the US dollar. Trump left in place a 10% baseline tax on most imports, and later reduced his massive 145% tax on Chinese goods to 30%.
A 50% levy on EU imports could raise consumer prices on everything from German cars to Italian olive oil.
The EU's total exports to the United States last year totaled about 500 billion euros ($566 billion), led by Germany (161 billion euros), Ireland (72 billion euros) and Italy (65 billion euros). Pharmaceuticals, cars and auto parts, chemicals and aircraft were among the largest exports, according to EU data.
DISPUTES OVER TARIFFS
The White House has been in trade negotiations with numerous countries, but progress has been unsteady. Finance leaders from the Group of Seven industrialized democracies tried to downplay disputes over the tariffs earlier in the week at a forum in the Canadian Rocky Mountains.
"The EU is one of Trump's least favorite regions, and he does not seem to have good relations with its leaders, which increases the chance of a prolonged trade war between the two," said Kathleen Brooks, research director at XTB.
Talks with Japan appeared less fraught.
After meeting separately with Lutnick and Greer on Friday, Japan's top trade negotiator, Ryosei Akazawa, said the two sides discussed expanding trade, non-tariff barriers and economic security issues. He described their talks as franker and more in-depth than before.
Speaking to reporters, Akazawa said that while it would be great if an agreement could be reached when Trump and Japanese Prime Minister Shigeru Ishiba meet at the Group of Seven summit next month in Canada, he would not rush just to secure a deal.
"Our country has national interests that must be protected, so it is not sufficient simply to forge an agreement quickly," Akazawa said. "As a negotiator, I can tell you that in negotiations the party stuck to a deadline usually loses."
US Treasury Secretary Scott Bessent would not comment on other potential trade deals, but said on Fox News that there would be more announced as the end of the 90-day pause on reciprocal tariffs approaches in July.
Apple declined to comment on Trump's threat, which would reverse exclusions he granted on smartphones and other electronics imported largely from China in a break for Big Tech firms that sell consumer goods. Apple shares fell 3% after Trump said in an early Truth Social post that he told company CEO Tim Cook "long ago" that "I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else."
Cook and Trump met on Tuesday, according to a source familiar with the situation.
Apple is speeding up plans to make most iPhones sold in the United States at factories in India by the end of 2026 to navigate potentially higher tariffs in China.
But the odds on moving production to the US are slimmer. In February, Apple said it will spend $500 billion over four years in nine American states, but that investment was not intended to bring iPhone manufacturing to the US.
"It is hard to imagine that Apple can be fully compliant with this request from the president in the next 3-5 years," D.A. Davidson & Co analyst Gil Luria said.



Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.


Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
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Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat

Saudi Minister of Finance Mohammed Aljadaan stressed Sunday that the world economy is going through a “profound transition,” saying emerging markets and developing economies now account for nearly 60 percent of the global Gross Domestic Product (GDP) in purchasing power terms and over 70 percent of global growth.

In his opening remarks at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla, the minister said these economies have become an increasingly important driver of global growth with their share of global economy more than doubling since 2010.

“Today, the 10 emerging economies in the G20 alone account for more than half of the world growth. Yet, they face a more complex and fragmented environment, elevated debt levels, slower trade growth and increasing exposure to geopolitical shocks.”

“Unfortunately, more than half of low income countries are either in or at the risk of debt distress. At the same time global trade growth has slowed at around half of what it was pre the pandemic,” Aljadaan added.

The Finance Minister stressed that the Saudi experience over the past decade has reinforced three lessons that may be relevant to the discussions at the two-day conference, which brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics.

“First, macroeconomic stability is not the enemy of growth. It is actually the foundation,” he said.

“Structural reforms deliver results only when institutions deliver. So there is no point of reforming ... if the institutions are unable to deliver,” he stated.

Finally, he said that “international cooperation matters more, not less, in a fragmented world.”


Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
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Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Sunday that world growth still lacks pre-pandemic levels, expressing concern as she expected more shocks amid high spending and rising debt levels in many countries.

Georgieva spoke at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla.

The two-day conference brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics to deliberate on policies to global stability, prosperity, and multilateral collaboration.

Georgieva said that the conference was launched last year in recognition of the growing role of emerging market economies in a world of sweeping transformations.

“I came out of this gathering .... With a sense of hope for the pragmatic attitude and determination to pursue good policies and build strong institutions,” she said.

Georgieva stressed that “good policies pay off,” and said that growth rates across emerging economies reached four percent this year, exceeding by a large margin those of advanced economies that are around 1.5 percent.