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US President Donald Trump has once again played the tariff card, despite the global economic chaos he had unleashed in early April with his so called “liberation day” tariffs.
Trump re-escalated his trade threats on Friday, by threatening a 50 percent tax on all imports from the European Union, as well a 25 percent tariff on Apple products unless iPhones are made in America.
It comes after Trump’s first round of tariffs raised prices for American consumers, and failed to produce the trade deals he had been seeking, or the widespread return of manufacturing to the US.
Tariff chaos
Indeed, after China refused to back down to the US tariff threats, Trump eventually relented and the US and China agreed earlier this month to suspend the punitive tariffs for 90 days.
But such was the chaos caused by Trump, that Apple was forced to reconsider where it sourced its iPhones for the US.
In response to the ‘liberation day’ levies, Tim Cook sought to shift production of iPhones destined for the US market to India, saying earlier this month that the majority of iPhones shipped to the US in the April to June quarter would be produced in India.
Apple had also chartered cargo flights to ferry 600 tons of iPhones, or as many as 1.5 million devices, to the United States from India in an effort to circumvent the worst of Trump’s tariffs.
Cook has also previously stated that Apple expects Trump’s tariff policies to lead to $900 million (£683m) in additional costs this quarter, with costs continuing to rise.
Meanwhile Apple is reportedly considering price increases for its autumn iPhone range, but is determined to avoid any appearance of relating the increases to US tariffs on Chinese imports, instead potentially attributing them to new features and design changes.
Little problem with Cook
Apple’s shift to Indian smartphone production angered Donald Trump, who last week during his visit to Qatar, publicly rebuked Apple CEO Tim Cook over the manufacturing change, saying he had a “little problem” with Cook.
“I had a little problem with Tim Cook yesterday,” said Trump, speaking in Qatar.
Referring to Apple’s recent promise to spend $500bn (£375bn) in the US, he added: “I said to him: ‘Tim, you’re my friend. You’re coming here with 500bn but now you’re building all over India. I don’t want you building in India.
“I said to Tim … we’ve treated you really good, we’ve put up with all the plants that you’ve built in China for years, now you got to build [for] us,” Trump reportedly stated. “We’re not interested in you building in India, India can take care of themselves … we want you to build here.”
Trump then said Apple was “going to be upping their production in the United States”, although he did not provide further details to back up the claim.
Tariffs threat
Now on Truth Social Donald Trump has ramped up the pressure on Apple and Cook to increase domestic manufacturing in the United States.
Some Wall Street analysts have estimated that moving iPhone production to the US would raise the price of the Apple smartphone by at least 25 percent.
Trump made the threat in a social media post on Friday morning, claiming that Apple will have to pay a tariff of 25 percent or more for iPhones made outside the United States.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.,” Trump posted.
Shares of Apple fell about 2 percent on Friday after the post.
Trump meanwhile in a separate post on Truth Social also threatened the Europe Union with tariffs of 50 percent.
“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,” he posted. “Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable.”
“Our discussions with them are going nowhere!” he added. “Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States. Thank you for your attention to this matter!”
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