Trump warns Apple of 25% tariff if iPhones are made in India

US President Donald Trump has reignited trade tensions by threatening to impose a 50% tariff on European Union (EU) goods starting June 1 and suggesting a 25% tariff on iPhones manufactured outside the United States.

The announcements, made via Trump's Truth Social platform on Friday, disrupted global financial markets after a period of relative calm.

US stocks fell in early trading, with the S&P 500 dropping 1.2% and the Nasdaq falling 1.5%. European markets also declined, with major German automakers and luxury brands—highly exposed to US tariffs—seeing sharp losses. Shares of Porsche, Mercedes, and BMW fell between 2% and 4.5%, while eyewear company EssilorLuxottica dropped 5.5%.

Apple's shares declined 3.7% in pre-market trading. Trump did not provide a timeline for the proposed iPhone tariff. The US, despite being a major smartphone market with over 60 million annual sales, lacks domestic manufacturing of smartphones.

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In his social media post, Trump criticised the EU for being "formed for the primary purpose of taking advantage of the United States on trade," and claimed that negotiations were "going nowhere."

The European Commission declined immediate comment, awaiting a scheduled call between EU trade chief Maroš Šefčovič and US trade representative Jamieson Greer. Meanwhile, EU envoys are meeting in Brussels to discuss the latest developments.

The EU exported €500 billion worth of goods to the US in 2023, with Germany, Ireland, and Italy as the top exporters. Major export categories include pharmaceuticals, cars, chemicals, and aircraft.

Experts warn the escalating rhetoric could lead to a prolonged trade conflict. Automotive companies like Audi and Volvo, which lack US production facilities, face difficult decisions. Volvo CEO Håkan Samuelsson said tariffs could render importing some models unfeasible but remained hopeful a deal could be reached.