US President Donald Trump is back in the headlines. He has proposed imposing a 50% tariff on products imported from the European Union (EU) starting June 1, 2025. Trump announced this statement on his Truth Social platform, emphasizing that negotiations with the EU were “completely ineffective.”
“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 $250,000,000 a year, a number which is totally unacceptable. Our discussions with them are going nowhere!”, — President Donald Trump, Truth Social
He explained this measure as “it’s time to play by our own rules” and emphasized that this tariff would not apply to products manufactured in the USA.
Panic reaction in the markets
Trump’s sharp statement caused a decline in US stock market futures. European markets also experienced a drop of around 2%. Investors are worried about the growing likelihood of a global trade war.
Prior to this, Trump had warned Apple that if iPhones were not manufactured in the USA, a 25% tariff might be imposed on them.
Trump’s historic tariff policy
Trump previously appeared to be retreating from tariff policies, praising trade agreements with China and Great Britain. This situation had a positive impact on the markets. However, this latest 50% tariff is quite different from his previous approach and will be in a protectionist spirit.
US Treasury Secretary Scott Bessent explained the decision as follows:
“But Trump believes that the EU proposals have not been of the same quality that we’ve seen from our other important trading partners,”
EU-US trade relations
The European Union was the second-largest buyer of US products in 2022, with total exports amounting to $351 billion. Therefore, Trump’s proposal could have not only economic but also diplomatic consequences.
So far, the European Commission has not officially commented on this tariff.
Conclusion: The risky direction of the global trade regime
If these tariffs are implemented, it will be the largest protectionist measure in the last decade. Austan Goolsbee, the head of the Chicago Federal Reserve, called this measure a “dangerous step that could lead to stagflation” – which slows down production and drives up prices.
According to Pivot.uz, this event could mark a turning point in economic diplomacy between Europe and the USA. Now it’s the EU’s turn – will they return to negotiations or will they admit that a global trade war has begun?
Update: On May 26, US President Donald Trump announced that the planned 50% tariff on European Union goods would be postponed from June 1 to July 9 to allow for continued negotiations.
Prepared by Navruzakhon Burieva
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