WILL JONES
President Donald Trump plans to hit the European Union with a massive 50% tariff on all goods it sends to the US, starting on June 1st. The Telegraph has more.
Mr Trump berated the EU as “very difficult to deal with”, and said US negotiations with Brussels to avoid a transatlantic trade war were “going nowhere”.
The President’s unexpected escalation would appear to cover the entire $600 billion (£447 billion) flow of goods exports from the EU to America. It would likely provoke more than €95 billion (£80 billion) of EU retaliatory measures.
Mr Trump seems to have lost patience with Brussels, after reports in recent days suggesting Washington was unhappy with the offer that European negotiators had tabled. The two sides have been negotiating a climbdown from Mr Trump’s ‘Liberation Day’ tariff salvo of April 2nd. This added a 20% EU-specific tariff to his “baseline” 10% tariff, but was later paused for 90 days.
Mr Trump made his announcement in a post on his online platform Truth Social, in which he resurfaced his full list of grievances with Brussels: the EU’s large trade surplus with the US, its trade barriers, value-added tax, legal and regulatory action against US companies, “ridiculous corporate penalties” and “monetary manipulations”.
“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 wrote.
“Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% tariff on the European Union, starting on June 1st 2025. There is no Tariff if the product is built or manufactured in the United States.”
A European Commission spokesman said Brussels would not be commenting until after senior trade officials from both sides had spoken to each other.
Worth reading in full.
Stock markets predictably plunged following the news:
Stock markets have slumped on both sides of the Atlantic after Donald Trump announced plans to impose a massive 50% tariff on EU exports to the US.
US stock markets opened down this afternoon as investors panicked at the prospect of an escalating US/EU trade war. Mr Trump also threatened tariffs against Apple’s made-in-India iPhones.
The benchmark S&P 500 dropped 0.9%, while the Dow Jones lost 0.8%. The tech-heavy Nasdaq fell 1.1%. Apple lost 2.3%.
The pan-European Stoxx 600, the German Dax, and the French Cac 40 indexes were down by about 1.2%, 1.7% and 2.2% on Friday afternoon.
The FTSE 100 fell by around 1.3% in the immediate aftermath of the announcement, which Mr Trump made on Truth social in the early afternoon, but has since clawed back some losses and was down by just over 0.5% on Friday at 3pm.
In the Spectator, Matthew Lynn says the EU is paying the price for failing to get a deal across the line while it still could.
Over the last few days, it offered a few minor concessions on imports of lobster from Maine, but that was about it. It refused to budge on agriculture, or cars, and even at the end of April it was still threatening Apple and Meta with huge fines as if everything was carrying on as normal. It complacently assumed it was in the clear and that President Trump was all bluster.
That has proved a fatal miscalculation. The American market will be open to goods from the UK, China, Canada, and probably soon Japan as well. But EU companies will face punitive levies. A Range Rover will face 10% tariffs, but a BMW 50%. Scottish or Canadian whisky will face modest levies, but cognac will be very highly taxed. And Ireland’s pharmaceutical industry, selling billions of dollars of medicines into the US market from offshore manufacturing hubs, could be wiped out. And the EU will only have itself to blame.
Meanwhile, Trump attacked Keir Starmer’s Net Zero drive and called for more drilling in the North Sea. Also from the Telegraph.
The US President said he “strongly” recommended the UK shift its focus away from renewables and back to fossil fuels.
He said Britain should “stop with the costly and unsightly windmills” and instead prioritise modern drilling.
Energy costs would then go “way down, and fast”, Mr Trump claimed in a post on his Truth Social website on Friday.
The comments represent a direct challenge to the approach being pursued by the Prime Minister and Ed Miliband, the Energy and Net Zero Secretary.
Sir Keir has committed to achieving the target of Net Zero emissions by 2050 and has placed a shift to clean energy at the heart of his premiership.
Labour pledged in its General Election manifesto to make Britain a “clean energy superpower” and to get to “zero-carbon electricity by 2030”.
The Prime Minister has said that oil and gas from the North Sea will be used during the transition to using more renewables. But Labour has vowed not to issue any new licences to explore new fields.
Featured image: Reddit, Twitter, Alamy
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