US-EU Trade War Fears Escalate Amid Tariff Threats

The European Union's trade chief, Maros Sefcovic, has called for a trade deal with the US based on "respect" not "threats" after US President Donald Trump threatened to impose a 50% tariff on all EU goods. Trump expressed impatience with the pace of ongoing trade negotiations, saying his plan to raise tariffs on June 1 was still on the table. The EU is one of the US's largest trading partners, with over $600 billion in goods traded last year. European governments have warned that higher tariffs would be damaging to both sides, and have urged de-escalation and a negotiated solution.

Fears of a US-EU trade war have reignited after Donald Trump threatened to impose a 50% tariff on the EU, claiming trade talks were "going nowhere". The European Commission refused to back down, with EU trade chief Maros Sefcovic saying "EU-US trade is unmatched and must be guided by mutual respect, not threats". The EU has held firm in the face of Trump's hostile rhetoric, with fellow leaders and ministers warning they are ready to respond to any tariffs. Trump's comments led to a negative market reaction, with major stock indices tumbling and Apple's shares falling 3% after he threatened to slap the company with a 25% tariff.

President Trump's threat to impose a 50% tariff on all European Union goods could cause significant economic damage to the US, Europe, and the global economy. Economists warn that such a move could lead to higher inflation and slower growth in the US, potentially pushing Europe into a recession and reducing global growth. The tariff threat has already caused uncertainty and unsettled financial markets, with companies reassessing investment risks in the US. European officials have prepared countermeasures, including tariffs on US automobiles, food, and services, and could retaliate with tariffs on the US services sector, a significant portion of the US economy. Experts believe that Trump's threat is a negotiating tactic, but the EU is unlikely to make quick concessions due to its complex decision-making process.

CNBC's Jim Cramer stated that President Donald Trump's global trade decisions are negatively impacting major US tech companies Nvidia and Apple. Cramer said investors must acknowledge Trump's continued influence on the market and consider it a risk factor when owning stocks. Trump has imposed restrictions on exports of artificial intelligence chips, hurting Nvidia, and is targeting Apple with punitive tariffs despite the company's efforts to move manufacturing out of China. Cramer believes Trump's actions are an attempt to control big tech and are characteristic of a "command economy" where the president is overruling company executives' business decisions.

President Trump's plan to bring iPhone manufacturing to the US faces numerous challenges, including the automation of tasks like inserting "little screws", which Commerce Secretary Howard Lutnick said would create jobs, but Apple CEO Tim Cook claimed requires unavailable technology; Trump threatened a 25% tariff on non-US made iPhones sold in the US.