The European Commission has asked the United States for clarification after Donald Trump proposed a 50% tariff on EU imports starting from 1 June, with trade leaders from both sides expected to speak later, reports RTE.
Officials in Brussels stated they would wait until after a scheduled phone call between European Trade Commissioner Maroš Šefčovič and US Trade Representative Jamieson Greer at 4pm Irish time before commenting on the tariff threat.
The announcement caused European markets to dip, with the euro retreating and euro zone bond yields dropping significantly, reports RTE.
On his Truth Social platform, Mr Trump wrote: “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.
“Our discussions with them are going nowhere!”
Mr Trump also warned he may slap a 25% tariff on Apple for iPhones sold—but not manufactured—in the United States, reports RTE.
More than 60 million smartphones are sold in the US each year, yet the country lacks domestic smartphone production.
These two major threats unsettled global markets, reversing recent signs of easing tensions.
The S&P 500 dropped 0.9% in early trading, while the Nasdaq fell 1.5%, and European stocks declined by 1.1%. Apple shares fell 2.5% shortly after markets opened in New York, reports RTE.
“This is a major escalation of trade tensions,” said Holger Schmieding, chief economist at Berenberg Bank, reports RTE.
“With Trump, you never know. But this would be a major escalation. The EU would have to react and it is something that would really hurt the US and European economy,” reports RTE.
Currently, the EU faces 25% tariffs on US imports of steel, aluminium, and vehicles, along with so-called “reciprocal” tariffs of 10% on nearly all other goods—a figure expected to double to 20% after a 90-day delay ends on 8 July.
US officials argue the tariffs aim to reduce America’s goods trade deficit with the EU, which reached nearly €200 billion ($226.48 billion) last year, according to Eurostat.
However, in services, the US runs a large trade surplus with the EU, reports RTE.
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Over the past week, Washington provided Brussels with a list of demands to help close the trade gap. These included easing non-tariff barriers like food safety regulations and repealing national digital services taxes, according to sources familiar with the discussions.
The EU responded by offering a balanced deal, which might include zero tariffs on industrial goods, increased European purchases of US liquefied natural gas and soybeans, and joint efforts to tackle steel overcapacity—an issue both sides blame on China, reports RTE.
The planned Šefčovič-Greer call follows up on this dialogue and could pave the way for a meeting in Paris in early June.
Polish Deputy Economy Minister Michal Baranowski, representing the EU presidency, suggested the 50% tariff threat might be a negotiating tactic.
“The European Union and the United States are negotiating. Some negotiate behind closed doors, others more in front of cameras,” he said during a Brussels meeting, adding discussions might continue into early July, reports RTE.
“The fact that we see some important statements in the public domain does not mean that they will translate into actions of the US administration,” he said, reports RTE.
The Commission has consistently said it prefers a negotiated solution but is prepared to act if talks fail.
The bloc had readied, then paused, tariffs on €21 billion worth of US goods in retaliation for the US metals tariffs. It also has a list of €95 billion in potential countermeasures to respond to the US “reciprocal” and car duties, reports RTE.
Taoiseach Micheál Martin described Mr Trump’s proposed 50% tariff as “enormously disappointing”.
In his statement, he said tariffs are harmful for all involved and stressed that negotiations are the “best and only sustainable way forward”, r r
Mr Martin added the EU had been negotiating in good faith, and such steep tariffs would “would grievously damage one of the world’s most dynamic and significant trading relationships, as well as disrupting wider global trade”
Tánaiste Simon Harris said both Ireland and the EU must keep pushing for a “negotiated settlement” to the issue, reports RTE.
He stated that the Government has always emphasized the need for “a substantive, calm, measured and comprehensive dialogue” with the US regarding tariffs.
Mr Harris added that tariffs are “bad for Ireland, the EU and the US” as they will “push up prices for consumers and businesses”, and he urged a practical response.
“A negotiated solution remains very clearly the goal and the preferred outcome,” the Tánaiste said, reports RTE.
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