Samsung and other smartphone manufacturers will also be subject to 25% tariff
Speaking to reporters in the Oval Office Friday afternoon, Donald Trump said that he will also target Samsung, which is based in South Korea, and “any other company that makes” with a 25% tariff.
“Or it would not be fair,” he said, adding that the White House will “appropriately have that done by the end of June”.
“When they build their plant here, there’s no tariffs. So they’re going to be building plants here,” he said.
When Trump first announced the tariff Friday morning, he targeted Apple CEO Tim Cook, who said recently that the company was shoring up manufacturing in India.
“I said that’s okay to go to India, but not going to sell into here without tariffs,” Trump said.
Key events
How would a 25% tariff on iPhones effect prices?
Keep in mind that iPhones are largely manufactured outside of the United States, particularly in China, which has been a major hub for Apple production. The company has also been expanding production in India, where 10% to 15% of iPhones are manufactured.
One analysis in April that looked at the possible impact of 54% tariffs on China said that the cost of producing iPhones could rise 43%. If Apple were to pass that cost entirely onto customers, that would mean the cheapest iPhone 16 model, which is currently $799, would cost $1,142, according to projections from Rosenblatt Securities – about a $343 increase.
A lower tariff would mean the cost increase would be smaller, and it all depends on how much of the tariff Apple is willing to absorb, but analysts say a cost increase would be difficult for Apple to avoid, given how dependent the company is on manufacturing outside the US.
Trump has been undeterred by warnings from the Federal Reserve that tariffs would inject instability into the economy that would be hard to control with monetary policy.
The Fed has the power to set interest rates, which dictates the price of borrowing money for mortgages or other types of loans.
Earlier in May, Fed officials – who are known for reticence in public remarks and statements – cautioned that “the risks of higher nemployment and higher inflation have risen” and, without naming Trump’s tariffs as the reason, said that uncertainty in the economy has increased.
Trump has suggested he has power over the Fed, at one point saying he would fire Fed chair Jerome Powell if the central bank didn’t lower interest rates. The president eventually walked back on the threats, particularly after negative reaction from the stock market.
It now seems that the courts could provide the Fed, which has historically be nonpartisan and independent from the executive branch, with protection from the White House. Earlier this week, the Supreme Court suggested that the Fed is uniquely protected from overreach from the White House in a ruling over the firing of two officials who were on the National Labor Relations Board.
“The Federal Reserve is a uniquely structured, quasi-private entity that follows in distinct historical tradition of the First and Second Banks,” justices wrote in a majority opinion for the Supreme Court.
US treasury secretary Scott Bessent said on Friday that he expects the US and China to continue in-person trade negotiations soon.
The US and China held talks in Switzerland earlier this month that lead to a deal rolling back the bulk of tariffs and other countermeasures imposed by the two countries.
Speaking on Bloomberg TV, Bessent said he expects several large deals to be announced in the coming weeks. He did not provide further details.
President Donald Trump’s 50% tariff threat is just another step in the on-going trade negotiations between the European Union and the United States, Polish deputy economy minister Michal Baranowski told reporters on Friday.
“I am sure we will get a good deal. I see this … as another step in our negotiations that in the end, I truly hope, will result in a good agreement that is balanced and fair for both sides”, he said.
US treasury secretary Scott Bessent said on Friday the Trump administration’s previously announced sovereign wealth fund plans have been paused.
President Donald Trump ordered the creation of the fund in February and has previously said revenue earned from tariffs on US imports could form the basis for a wealth fund.
“I think (the) president’s decided that it’s on pause while we work on everything else that we’re doing now,” Bessent said during an interview with Bloomberg TV.
Chicago Fed president Austan Goolsbee said Friday that president Donald Trump’s new tariff threats have complicated monetary policy and likely delayed interest rate changes.
In a CNBC interview, he reaffirmed his view that rates will eventually move lower but said the Fed will pause for now amid trade uncertainty.
“Everything’s always on the table. But I feel like the bar for me is a little higher for action in any direction while we’re waiting to get some clarity,” Goolsbee told Squawk Box. He warned that tariffs with a “stagflationary impact” would be “the central bank’s worst situation.”
“So I think we’ll have to see how big the impacts on prices are,” he added. “I know people hate inflation.”
Jillian Ambrose
Reform UK has promised to reverse the government’s ban on fresh North Sea oil and gas drilling as a “day one” priority if elected to power, with the taxpayer taking a stake in the projects.
Richard Tice, the party’s deputy leader, has met with senior UK oil executives in recent weeks to pledge the party’s support for the industry, which has been hit hard by the government’s windfall tax and moves to block fresh North Sea exploration licences.
Tice told the energy bosses to expect a reversal of the government’s ban alongside billions of pounds of public investment in their projects if the party comes to power in the 2029 election.
The public investments would effectively hand taxpayers an equity stake in North Sea fossil fuel developments, which have stalled in recent months after Labour swept to power with a manifesto that promised to end fresh exploration licences for new oil and gas fields.
“As long as there’s oil in the North Sea, we should be drilling for it,” a spokesperson for Reform UK said. “There are clear benefits for securing jobs and energy independence.”
A senior cognac industry official slammed on Friday US president Donald Trump’s latest tariffs proposal for the European Union (EU), saying it would put the cognac industry in an untenable position, Reuters reported.
On Friday, Trump recommended a 50% tariff on European Union goods starting 1 June.
“The 50 percent tariffs proposed by president Trump would mean we will no longer be able to sell our products in the United States, which is our biggest market, representing more than 50 percent of cognac sales in terms of volumes”, said the official.
European markets close
Graeme Wearden
Donald Trump’s threat of a 50% tariff on EU imports have led to losses on the major European indices today.
Germany’s DAX has closed for the week, down 1.6% today, with carmakers BMW (-3.7%) and Mercedes-Benz (-4%) among the fallers.
France’s CAC share index shed 1.65% and Italy’s FTSE MIB dropped by almost 2%.
The London stock market got away lightly, with the FTSE 100 only dropping by 21 points or 0.24% to 8,718 points, its lowest closing level since Monday.
Kate Leaman, chief market analyst at AvaTrade, reports that investors are uneasy.
“President Trump’s latest tariff threats have once again put the markets on edge, reminding investors just how quickly geopolitical risks can resurface.
The proposal to slap 50% duties on European imports and 25% tariffs on iPhones not made in the U.S. has jolted sentiment, and sparked a broad selloff that saw U.S. stocks slide around 1% on Friday. At the heart of the reaction is the fear escalating trade tensions are once again back in play and the reaction that this could have on inflation, corporate earnings, and also global supply chains.
Wall Street’s main indexes slumped on Friday after U.S. President Donald Trump recommended 50% tariffs on the European Union, while Apple tumbled after he warned it would have to pay tariffs if iPhones were not manufactured in the United States.
“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,” Trump said in a post on Truth Social.
Apple touched a two-week low and was down 2.5% after Trump said in a separate post before this that the iPhone-maker would be subject to 25% tariffs if its phones sold in the U.S. were not made within the country’s borders.
At 11.18am ET, the Dow Jones industrial average fell 330.17 points, or 0.79%, to 41,526.96, the S&P 500 lost 54.98 points, or 0.94%, to 5,787.03, and the Nasdaq Composite lost 229.40 points, or 1.20%, to 18,697.82.
Wall Street’s “fear gauge”, the CBOE Volatility Index , spiked to a more than two-week high and was last at 22.14 points. Ten of the 11 S&P sub-sectors fell, with consumer discretionary and information technology being the worst hit.
Most megacap and growth stocks dropped, with Amazon and Nvidia declining more than 1% each. A gauge for semiconductor stocks fell more than 2%, while carriers including American Airlines shed about 2%.
Deckers Outdoor slumped almost 20% after the maker of UGG boots forecast first-quarter net sales below estimates and said it would not provide annual targets. Sportswear giant Nike also dropped, falling 2.2%.
