Trump threatens tariffs on European Union, Apple as his trade war intensifies
US Treasury Secretary Scott Bessent tried to provide some clarity on Trump’s postings in a Friday interview on Fox News.
Bessent said the EU has a “collective action problem” because its 27 member states are being represented by “this one group in Brussels,” such that the “underlying countries don’t even know what the EU is negotiating on their behalf.”
US Treasury Secretary Scott Bessent said the goal was to have Apple bring more of its computer chip supply chain into the US.Credit: Bloomberg
The Treasury secretary said he was not in a White House meeting this week that Cook attended, but he also spoke with the Apple CEO this week. Bessent said the goal was to have Apple bring more of its computer chip supply chain into the US
The core of Trump’s argument against the EU is that America runs a “totally unacceptable” trade deficit with the 27 member states. Countries run trade deficits when they import more goods than they export.
From the vantage point of the EU’s executive commission, trade with the US is roughly in balance if both goods and services are included. As a global centre for finance and technology, the US runs a trade surplus in services with Europe. That offsets some of the trade gap in goods and puts the imbalance at 48 billion euros ($US54 billion).
German Foreign Minister Johann Wadephul said the EU’s executive commission has his country’s full support in working to “preserve our access to the American market.”
“I think such tariffs help no one, but would just lead to economic development in both markets suffering,” Wadephul said in Berlin. “So we are still counting on negotiations, and support the European Commission in defending Europe and the European market while at the same time working on persuasion in America.”
Trump aides have said the goal of his tariffs was to isolate China and strike new agreements with allies, but the president’s tariff threats undermine the logic of those claims.
Trump has run hot and cold on his relationship with Apple, a sign that currying favour with him might not necessarily shield a company from his anger. He has essentially told companies such as Walmart to “eat” the costs of his tariffs instead of raising prices, even though doing so could squeeze profits and cause layoffs. He now appears to be deploying a similar degree of pressure to force Apple to accept the higher costs of relocating its supply chains.
Trump had previously created an exemption on electronics imported from China to help companies such as Apple, something he could now remove. He also threatened separate 25 per cent import taxes on computer chips and could have the tariffs schedule rewritten in ways that could expose Apple products to the taxes.
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Until recently, the US president repeatedly bragged about the $500 billion that Apple in February pledged to invest domestically as part of its development of artificial intelligence technologies. But he publicly turned against the company last week while speaking in Qatar.
“I had a little problem with Tim Cook yesterday,” Trump told the audience. “I said to him, ‘My friend, I treated you very good. You’re coming here with $US500 billion, but now I hear you’re building all over India. I don’t want you building in India.’”
Analysts have been sceptical that Apple could quickly shift device manufacturing to the US, mainly because it has spent decades embedding complex supply chains in China to feed the factories.
