The Recent US Tariff Threats Against the EU
The recent US tariff threats against the European Union have significant impacts on the European stock markets. US President Donald Trump announced that, starting June 1, 2025, tariffs of 50 percent would be imposed on imports from the EU, as negotiations with Brussels are not advancing, in his view. This announcement led to a sharp decline in stock prices in Europe.
Impact on European Markets
- DAX: The German benchmark index DAX dropped about 2.03 percent after Trump’s announcement, marking a decline from previous gains. The DAX had recently reached the 24,000 points mark, which is now jeopardized by the tariff threats.
- CAC 40: The French benchmark index CAC 40 recorded losses of about 2.43 percent.
- EuroStoxx 50: The Eurozone benchmark index EuroStoxx 50 decreased by 1.81 percent and reported a weekly loss of 1.9 percent.
Background and Possible Consequences
Trump justifies his tariff threats by claiming that the EU is taking advantage of the US in trade policy. He asserts that the EU has achieved a large export surplus over the US through trade barriers such as VAT and currency manipulation. These measures could lead to a trade war, further disrupting global supply chains.
For retail investors, such developments are particularly relevant as they can significantly affect the value of their investments. In particular, companies that heavily depend on trade with the US could suffer from the increased tariffs.
Further Developments
In addition to the tariff threats against the EU, Trump has also threatened Apple with a 25 percent tariff if the company does not start manufacturing iPhones in the US. These measures indicate that the US is pursuing a tough trade policy course that affects the global economy.
Overall, the US tariff threats are an important factor for European markets and can lead to further turbulence as long as no agreement is reached.