U.S. President Donald Trump on Friday announced plans to impose a 50% tariff on all imports from the European Union starting June 1, 2025. The surprise declaration, made via his Truth Social platform, marks a sharp escalation in ongoing trade tensions.
Trump claimed talks with the EU had stalled, stating, “Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union.”
The announcement rattled global markets. The S&P 500 dropped 1% at the open, while the Nasdaq fell 1.3%. European stocks were also hit, with the STOXX Europe 600 index down 1.7%. Germany’s auto sector suffered the most: BMW shares dropped 3.7%, Volkswagen 2.6%, and Mercedes-Benz 4%. In the UK, the FTSE 100 ended the day down 0.2% after an initial 1.5% plunge.
This move follows a 20% U.S. tariff on most EU goods imposed on April 2, which was later reduced temporarily during a 90-day negotiation window set to expire July 8. Tariffs on steel, aluminum, and vehicle parts remain at 25%, with new duties on pharmaceuticals and semiconductors under consideration.
“This is a serious escalation,” said Holger Schmieding, chief economist at Berenberg. “If implemented, it could significantly harm both U.S. and EU economies.”
U.S. Treasury Secretary Scott Bessent defended the plan, saying the EU’s trade proposals had fallen short compared to other countries. “The 90-day pause was meant for fair negotiations. The EU hasn’t met that standard,” Bessent told Fox News.
EU officials continue intensive talks with the White House to prevent further tariff increases, as countries scramble to negotiate deals before the July deadline.