President Donald Trump announced on Friday that he will impose a 50% tariff on goods imported from the European Union beginning June 1, 2025. He cited what he described as unfair trade practices by Europe and stalled negotiations as reasons for the new tariff.
Trump pointed to high trade barriers, value-added taxes, and legal actions against American companies as causes of the large U.S. trade deficit with the EU. He said these factors have led to a deficit exceeding $250 billion annually.
Later the same day, Trump made it clear that he was no longer seeking a trade deal with the European Union and confirmed the tariff rate. He also mentioned that the tariff could be delayed if European companies invest in U.S. manufacturing plants.
European Trade Commissioner Maroš Šefčovič responded after talks with U.S. officials by stating that any successful agreement must be based on mutual respect. The EU said it remains ready to negotiate in good faith while defending its interests.
The announcement caused a sharp drop in global markets. European stock indexes, including Germany’s DAX, France’s CAC, and the London FTSE, all fell by over 1%. U.S. markets also declined, with the Dow Jones dropping by more than 480 points.
U.S. Treasury Secretary Scott Bessent criticized the EU’s trade proposals as insufficient compared to other partners. He highlighted progress in talks with Asian countries and noted upcoming discussions with China.
The proposed 50% tariff is more than double the 20% rate that was briefly introduced in April but later paused to allow negotiations. That pause is set to expire on July 9, 2025. So far, only the United Kingdom has secured a trade deal with the U.S. since then.
Trump remains critical of Europe’s value-added taxes and digital service taxes, which he says unfairly target American exporters and technology companies. Last year, the U.S. recorded a $236 billion trade deficit with the EU, according to the Commerce Department.
The European Commission has prepared a $108 billion retaliatory tariff package if talks with the U.S. fail. The plan would affect a wide range of goods and could take effect if negotiations break down.
European leaders warned that steep tariffs would damage both economies and disrupt global trade. Despite the tension, the EU continues to seek a balanced trade outcome.
In addition to EU tariffs, Trump threatened a 25% tariff on iPhones made overseas, shortly after meeting with Apple CEO Tim Cook. Apple has plans to move some production to India, but Trump expressed frustration that manufacturing is not based in the U.S.
These actions signal that Trump is willing to escalate trade tensions with key allies in order to push for new terms in international trade.
