Wall Street dropped at the open on Friday after U.S. President Donald Trump recommended 50 per cent tariffs on the European Union, while Apple shares slid after he warned the company would have to pay tariffs if its phones were not made in the United States.
The Dow Jones Industrial Average fell 333.4 points, or 0.80 per cent, at the open. The S&P 500 fell 60.1 points, or 1.03 per cent, while the Nasdaq Composite dropped 303.4 points, or 1.60 per cent, at the opening bell.
The president’s renewed trade threats sent the global market roiling after weeks of de-escalation provided some reprieve.
Trump threatened to impose a 25 per cent tariff on Apple for any iPhones sold, but not manufactured, in the U.S. More than 60 million phones are sold in the U.S. annually, but the country has no smartphone manufacturing.
He also said he would recommend a 50 per cent tariff on the European Union to begin on June 1, which would result in stiff levies on luxury items, pharmaceuticals and other goods produced by European manufacturers.
The EU Commission declined to comment, saying it would wait for a phone call between EU trade chief Maros Sefcovic and his U.S. counterpart Jamieson Greer to take place later on Friday.
Trump did not give a timeframe for his warning to Apple.
“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump said in a post on Truth Social. “If that is not the case, a Tariff of at least 25 per cent must be paid by Apple to the U.S.”
U.S.-manufactured iPhones a ‘fairy tale’: analyst
The White House has been in negotiations with numerous countries over trade issues, but progress has been unsteady.
Trump’s aggressive tariffs in April, which would have raised the rate consumers and businesses would have to pay for imported goods by roughly 25 per cent, sparked a selloff in U.S. assets, including stocks, the dollar and Treasury bonds. Markets have since rebounded.
It is not clear if Trump can levy a tariff on an individual company. Apple did not immediately respond to a Reuters request for comment.
After Trump’s levies on China rose to more than 100 per cent in early April, the White House backed off due to market turmoil, granting exclusions from steep tariffs on smartphones and some other electronics imported largely from China, in a break for Apple and other tech firms that rely on imported products.
Dan Ives, an analyst with wealth management firm Wedbush Securities, wrote in a note to investors that he doesn’t see iPhone production moving to the U.S. in the near term, “given the upside-down cost model and Herculean-like supply chain logistics needed for such an initiative.”
A U.S.-manufactured iPhone would cost roughly $3,500 US, and it would take about five to 10 years to shift production over to the U.S., Ives estimated.
“We believe the concept of Apple producing iPhones in the U.S. is a fairy tale that is not feasible.”
Apple reportedly aims to make most of its iPhones sold in the United States at factories in India by the end of 2026, and is speeding up those plans to navigate potentially higher tariffs in China, its main manufacturing base.
Apple is positioning India as an alternative manufacturing base amid Trump’s tariffs on China, which have raised supply-chain concerns and fears of higher iPhone prices.
The iPhone maker said most of its smartphones sold in the United States would originate from India in the June quarter.
