Trump Warns of 50% Import Tax on European Union Goods

President Donald Trump announced on Friday his intention to impose a 50% tariff on all European Union imports to the United States.

The unexpected declaration came via Trump’s Truth Social account, where he stated that negotiations with the EU to reach trade agreements had reached an impasse.

Trump said the European Union exploits America in commercial relations, declaring: “Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025.”

Related: Trump Warns Putin Of Tariffs Over Ukraine War

Financial markets reacted negatively to the announcement, with the S&P 500 declining 1% and the Nasdaq dropping 1.3% at market open.

European markets also suffered, as the STOXX Europe 600 index decreased by 1.7%.

London’s FTSE 100 ended the day down 0.2% despite initially falling as much as 1.5%. German automotive companies experienced significant losses, with BMW falling 3.7%, Volkswagen dropping 2.6%, and Mercedes-Benz declining 4%.

The United States previously implemented a 20% “reciprocal” tariff on most European goods on April 2nd, but reduced this rate by half one week later until July 8th to provide negotiation time.

Washington has maintained 25% import duties on steel, aluminum, and automotive components while threatening comparable measures on pharmaceuticals, semiconductors, and additional products.

Berenberg’s chief economist Holger Schmieding characterized the development as “a major escalation of trade tensions” on Friday.

“With Trump you never know but this would be a major escalation. The EU would have to react, and it is something that would really hurt the US and European economy.”

Treasury Secretary Scott Bessent expressed hope that the threat would motivate the EU to take action.

“The 90-day pause on the April 2 tariffs was based on countries or trade blocs coming to us and negotiating in good faith,” Bessent explained to Fox News.

He indicated that the EU’s negotiation proposals “have not been of the same quality” compared to other trading partners.

European Union representatives have been engaged in intensive discussions with White House officials since Trump first announced his “liberation day” tariffs.

Multiple nations have been conducting talks aimed at reducing their own tariff burdens before the 90-day negotiation period concludes.