U.S. President Donald Trump has announced plans to impose a sweeping 50% tariff on all imports from the European Union starting June 1, 2025, citing stalled trade negotiations and what he described as persistent unfair practices by the EU.
In a post on his social media platform, Truth Social, Trump expressed frustration with the lack of progress in bilateral trade discussions, saying:
“Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on 1 June 2025.”
The surprise declaration immediately rattled global markets. Futures for the S&P 500 dropped 1.5% ahead of Wall Street’s opening, while Europe’s STOXX 600 index fell by 1.7%, underscoring investor concern over escalating trade tensions.
Rising Tariff War
Trump’s announcement marks a significant escalation in a trade standoff that has been simmering since the U.S. implemented a 20% “reciprocal” tariff on most EU goods on April 2. That rate was later reduced to 10% in a temporary measure designed to allow negotiations to continue until July 8. However, key tariffs, including 25% levies on steel, aluminium, and vehicle parts—remain in place, with threats of new duties looming over sectors such as pharmaceuticals, semiconductors, and electronics.
“This is a major escalation of trade tensions,” said Holger Schmieding, chief economist at Berenberg Bank.
“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 U.S. and European economy.”
White House Strategy and Global Response
Since Trump reintroduced aggressive trade measures, dubbed “liberation day” tariffs, White House officials have held intensive negotiations with EU counterparts and other trading nations. While there has been movement on some fronts—such as a recent agreement with China that saw U.S. tariffs drop from 145% to 30% and China’s retaliatory duties cut from 125% to 10%—Trump has signaled that Washington cannot handle simultaneous negotiations with dozens of countries.
In a move to streamline the administration’s strategy, Trump recently stated that the U.S. would begin sending letters to individual trading partners, notifying them of new tariff rates unilaterally imposed by Washington.
While these signals of a softening stance briefly stabilized markets, that calm was short-lived. The new threat of a 50% EU tariff, coupled with a separate warning of a 25% import tax on iPhones manufactured abroad, has renewed investor anxiety and raised the prospect of a global trade disruption.
EU Offers and Countermeasures
In an effort to defuse tensions, the European Union on Thursday presented a revised trade proposal that included gradual tariff reductions on non-sensitive goods and cooperation on key areas such as energy, artificial intelligence, and digital infrastructure. EU officials also offered to extend a tariff-free agreement on U.S. lobster exports originally signed in 2020, according to the Financial Times.
Despite these overtures, the proposal appears to have fallen short of U.S. demands. Trump has continued to push for the imposition of a uniform 10% tariff on all imports—already agreed with the UK—but the EU has resisted such terms.
As a contingency, Brussels is preparing approximately $108 billion in retaliatory tariffs, to be deployed if talks fail completely.