Trump Pushes 50% Tariff on EU Imports

US President Donald Trump announced on May 23 his recommendation to impose a 50% tariff on imports from the European Union, citing lack of progress in trade negotiations and persistent trade imbalances.

“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. Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than US$250 million a year, a number which is totally unacceptable,” posts Trump on Truth Social. “Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025.”

The proposed tariff represents more than double the 20% reciprocal tariff briefly enacted in April and paused to allow further talks. According to the US Commerce Department, the trade deficit with the European Union reached US$236 billion in 2024, underscoring Trump’s longstanding focus on bilateral imbalances as a rationale for protectionist measures.

Trump’s post is consistent with his prior criticism of EU trade practices, particularly regarding non-monetary trade barriers such as value-added taxes and digital services taxes. Value-added taxes are remitted on exports from the European Union but applied to US exports into the bloc. Digital services taxes, meanwhile, apply to gross revenues of large online firms and disproportionately impact major US technology companies such as Apple, Meta, Amazon, and Google. According to the Congressional Research Service, these mechanisms have been identified as structural disadvantages for US firms operating in the EU market.

The immediate market reaction to the announcement was negative. The STOXX Europe 600 index dropped 1.7%, while Germany’s DAX fell 2.4%, and France’s CAC 40 declined 2.2%. London’s FTSE 100 was down 1%. US markets also experienced declines, with the Dow Jones Industrial Average falling 480 points, or 1.15%, at opening, CNN reports.

Scott Bessent, US Secretary of the Treasury, tells Fox News that the European Union has not presented proposals matching the quality of those from other partners and characterized the bloc’s negotiating stance as hindered by a “collective action problem.” He highlights ongoing talks with other nations, particularly India, which are reportedly progressing more constructively.

In response, Ursula von der Leyen, President, European Commission, says that the European Union has proposed a “zero-for-zero” tariff arrangement and is prepared to take retaliatory action if negotiations break down. A US$108 billion tariff package targeting a wide range of US goods has already been prepared, according to a May 8 statement from the Commission.

High-ranking EU officials also expressed discontent. Laurent Saint-Martin, France Trade Minister, labeled the threat unhelpful to ongoing negotiations, while Micheál Martin, Ireland Prime Minister, warned of economic damage to transatlantic trade and broader global disruption.

The latest development adds to an escalation in trade tensions, with Trump having also recently threatened a 25% tariff on Apple products manufactured outside the United States. These statements signal a broader effort to push for domestic production and trade realignment under protectionist principles.