Trump Proposes 50% Tariffs on EU Goods Starting June 1

In a significant escalation of trade tensions, U.S. President Donald Trump has proposed a 50% tariff on goods imported from the European Union, effective June 1. The announcement was made via his social media platform, where Trump cited slow progress in trade negotiations with the EU as the rationale behind this drastic measure.

Following the announcement, the European Commission declined immediate comment, opting to wait for a scheduled call between EU Trade Commissioner Maros Sefcovic and U.S. trade representative Jamieson Greer. Trump expressed frustration over the complexities of trade discussions with the EU, claiming that the bloc was created to exploit U.S. trade policies.

According to Trump, the EU has established various trade barriers that have contributed to a significant trade surplus in its favor, including value-added taxes, excessive penalties on U.S. companies, currency manipulation, and what he termed as unjust lawsuits against American businesses. He emphasized that products manufactured in the U.S. would be exempt from the proposed tariffs.

German Foreign Minister Johann Wadephul warned that increased tariffs would be detrimental to both European and U.S. economies. He stated that Germany would continue to support the EU in its negotiations with the United States, highlighting the need for a collaborative approach.

Since commencing his second term in office on January 20, Trump has adopted a stringent trade policy that has disrupted global supply chains. Earlier this year, he imposed high tariffs on various countries and the EU, only to temporarily reduce them back to a base rate of 10% shortly thereafter. The U.S. already imposes a 25% tariff on steel and aluminum imports, as well as on automobiles.

The EU has been actively seeking to engage in negotiations with the U.S. Trump had previously threatened to impose a blanket 25% tariff on EU goods if a bilateral agreement was not reached by July. The EU proposed a mutual elimination of tariffs on industrial goods, but the Trump administration has yet to respond. In the event that negotiations fail, the EU has prepared countermeasures that could impose tariffs on U.S. products worth nearly EUR100 billion.

It remains uncertain whether Trump's 50% tariffs will be implemented as planned, as he has previously threatened high tariffs that did not materialize. The latest announcements have already had repercussions in financial markets, with the German stock index DAX experiencing a decline while the Euro lost value.