Trump’s Trade Threats
A new trade storm is brewing. Donald Trump, the US President, says he’ll slap a 50% tax on all goods from the European Union and 25% on Apple products if iPhone production doesn’t move back to the US.
On May 24, 2024, Trump posted on Truth Social that talks with the EU have gone nowhere. He wants to start collecting the 50% tax on June 1. Trump claims he won’t tax goods made or assembled in the US.
This means EU goods could face higher taxes than Chinese ones, which just got a 30% tax cut. Trump says his policies are meant to pressure China and negotiate new deals with allies. But his latest threat has experts confused. The EU might be at a disadvantage compared to China.
- Trump’s tax plan could harm EU goods.
- EU’s strategy has failed, says Marcel Fratzscher, a German economist.
- Trump sees the EU’s hesitation as a weakness.
Before this, the EU tried to gradually eliminate all import taxes. Trump wanted to keep a 10% base tax on most goods. Now, he’s raising the stakes. If the tax hike happens, it could affect the US electronics supply chain and long-term economic ties between the US and Europe.
Expert Opinion
Fratzscher says the EU and Germany’s approach to the trade conflict has completely failed. Trump has taken advantage of the EU’s hesitation. The EU’s weakness has led to this situation.
The trade war between the US and EU could escalate. The EU might respond with its own taxes, affecting US goods. This could lead to a global trade crisis, harming economies worldwide. The situation remains uncertain, with both sides refusing to back down.