Trump’s Tariff Escalation Shakes Global Markets: Apple, EU & Retailers Caught in the Crossfire
Published: May 23, 2025 | By: MarketInsight News
In a dramatic escalation of trade tensions, President Donald Trump has reignited global trade war fears with new threats targeting both major U.S. corporations and international trading partners. His recent announcements, which include proposed tariffs on Apple and a sweeping 50% duty on all European Union imports, are sending shockwaves through global markets and supply chains.
Apple in the Crosshairs: 25% Tariff Threat Over Offshore iPhone Production
In a post on Truth Social, President Trump declared that Apple (NASDAQ: AAPL) must manufacture iPhones on U.S. soil or face a 25% import tariff. This ultimatum directly challenges Apple’s global manufacturing strategy, which relies heavily on production facilities in China and India.
“If [iPhones] are not made in the United States, a tariff of at least 25% must be paid by Apple to the U.S.,” Trump wrote.
Following the announcement, Apple shares dropped by 2.48% on Friday, reflecting investor unease about potential cost increases and supply chain disruption.
A 50% Tariff on EU Imports: Luxury Sector and Automakers Hit Hard
Trump further inflamed trade tensions by proposing a 50% flat tariff on all European Union imports, citing stalled negotiations and what he labeled as unfair trade practices. Luxury brands such as LVMH, Hermes, and Burberry saw immediate declines in stock value, with some shares falling by over 4%.
Volvo Cars, which manufactures electric vehicles in Belgium, warned that the tariffs could significantly limit its ability to compete in the U.S. market. CEO Hakan Samuelsson stated that customers may have to absorb increased costs, further straining consumer demand.
Global Repercussions: Canada’s Economy, Asian Diplomacy & Retail Uncertainty
Canada is reportedly entering a recession, with economists attributing the downturn to declining exports and Trump’s tariffs. Meanwhile, Southeast Asian ministers warn of geopolitical strain as the U.S.-China trade rivalry forces countries to “pick sides.”
Retailers are also sounding alarms. Walmart and Ralph Lauren have hinted at price increases and revenue shortfalls, driven by volatile tariff policy. Ralph Lauren cut its fiscal forecast, with 96% of its goods sourced from abroad and 15% from China.
U.S.-China Talks Continue Amid Chip Tensions
Despite the global escalation, the U.S. and China have maintained communication. Senior officials from both nations confirmed a productive call on Thursday, aimed at preserving progress made during earlier trade talks. However, tensions remain high following recent U.S. export restrictions on AI chips to China.
Looking Ahead: Will Diplomacy Prevail or Tariff War Deepen?
The next round of trade talks with the EU and Japan is expected to be crucial. President Trump has made it clear that unless trade terms change in favor of the U.S., tariffs will remain a central tool in his administration’s strategy.
As global markets brace for potential economic fallout, businesses, consumers, and governments alike are watching closely. One thing is certain: trade diplomacy in 2025 is entering its most unpredictable chapter yet.
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