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(Bloomberg) — President Donald Trump threatened a 50% tariff on goods from the European Union starting on June 1, saying “our discussions with them are going nowhere.”
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“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with,” Trump said in a Truth Social post on Friday, criticizing what he said were the trade bloc’s “powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies.”
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Futures for the S&P 500 Index fell 1.1% while Nasdaq 100 futures declined 1.3% Friday morning after Trump’s threat, which also came minutes after the president also said he would hit American tech giant Apple Inc. with tariffs of at least 25% on its goods if it does not make its popular iPhones in the US.
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Trump’s latest trade posturing comes after the EU, earlier this week, shared a revived trade proposal with the US in a bid to jump-start their talks.
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The new framework includes proposals that take into account US interests, including international labor rights, environmental standards, economic security and gradually reducing tariffs to zero on both sides for non-sensitive agricultural products as well as industrial goods, according to people familiar with the matter.
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The proposal also outlined areas where the US and EU could cooperate such as mutual investments and strategic procurement in energy, artificial intelligence and digital connectivity.
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But there were signals the US was unhappy with the offer. Commerce Secretary Howard Lutnick on Wednesday said at an Axios event that some trade negotiations had proved “impossible.”
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“Like the European Union — it’s just very difficult because, you know, Germany would like to make a deal, but they’re not allowed,” Lutnick said.
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The EU is also moving forward with preparing countermeasures if negotiations fail to produce a satisfactory outcome. The trade bloc has put together plans to hit €95 billion of US exports ($107 billion) with additional tariffs in response to Trump’s “reciprocal” levies and 25% tariffs on cars and some parts.
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The EU agreed earlier this month to delay for 90 days the implementation of a separate set of retaliatory tariffs against the US over 25% duties Trump imposed on the bloc’s steel and aluminum exports. That move came after Trump lowered his so-called reciprocal rate on most EU exports to 10% from 20% for the same amount of time.
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Nations and trading blocs have been racing to cut deals with Trump to avoid the higher tariffs.
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