Silke Mayr President Donald Trump sharply increased trade tensions with the European Union by announcing plans to impose a 50% tariff on European goods starting June 1, 2025. He argued that the EU’s trade policies create an unfair imbalance that harms American companies. Trump pointed to Europe’s high trade barriers, taxes, and lawsuits against U.S. businesses as key reasons for this action.
In a social media post, Trump criticized the European Union for high value-added taxes (VAT), corporate penalties, and trade practices that have contributed to a $250 billion trade deficit with the United States. “Our discussions with them are going nowhere,” he said. “Therefore, I am recommending a straight 50% tariff on the European Union, starting on June 1, 2025.”
At a White House signing event later that day, Trump reaffirmed his position. “I’m not looking for a deal. We’ve set the deal — it’s at 50%,” he stated. However, he allowed some flexibility, adding, “If somebody comes in and wants to build a plant here, I can talk to them about a little bit of a delay.”
The European Union quickly responded. European Commissioner for Trade Maroš Šefčovič, following talks with U.S. trade officials, said the EU remains committed to negotiations based on mutual respect and urged the U.S. to return to the discussion table. Šefčovič emphasized that the EU is prepared to defend its interests but prefers a fair and workable agreement.
The announcement caused swift market reactions. U.S. Treasury Secretary Scott Bessent criticized the EU for lacking a unified approach and said EU trade offers had not matched those from other partners. European markets fell sharply: the STOXX 600 dropped 1.7%, Germany’s DAX slid 2.4%, France’s CAC lost 2.2%, and London’s FTSE declined 1%. In the U.S., the Dow Jones opened 480 points lower before partially recovering later.
This 50% tariff proposal doubles the 20% tariff rate temporarily imposed in April but paused to allow further talks. The pause ends on July 9. Since then, the U.S. has completed only one new trade deal, with the United Kingdom. Negotiations with other countries, including India, continue.
Trump also raised concerns about non-monetary trade barriers like VAT and digital service taxes, which he claims unfairly target U.S. exports and technology companies. The U.S. Commerce Department reported a $236 billion trade deficit with the EU last year, which Trump calls unacceptable and links to European tax policies.
In response, the European Commission proposed retaliatory tariffs worth nearly $108 billion. These tariffs would target a wide range of industrial and agricultural goods if talks fail. Commission President Ursula von der Leyen said the EU had offered a “zero-for-zero” tariff deal and still seeks a balanced agreement. She warned, “All instruments, all options stay on the table.”
European leaders voiced concern. Irish Prime Minister Micheál Martin called Trump’s threat “enormously disappointing,” saying the tariff pause had opened a door for productive talks. French Trade Minister Laurent Saint-Martin said Washington’s aggressive stance hurts progress but added that Europe remains focused on easing tensions and is ready to respond if needed.
The trade dispute also affected major companies. Trump threatened a 25% tariff on Apple products if the company continues making iPhones overseas. Despite Apple CEO Tim Cook’s plans to move some production to India, Trump remains frustrated that iPhones are not made in the U.S.
As the June 1 deadline approaches, Trump’s tariff threat signals a strong push to reshape global trade. This move may add pressure to global supply chains and risk reigniting conflicts with longtime allies.