Trump calls for 50% tariff on EU, starting June 1

US President Donald Trump today (23 May) called for a 50% tariff on imports from the European Union, raising the stakes in his global trade war.

Lamenting that negotiations with the EU "are going nowhere," Trump said on Truth Social he is recommending "a straight 50% Tariff on the European Union, starting on June 1, 2025," reports AFP.

Stock markets slumped in response to the post, with S&P 500 futures down by 1.5% before the New York market opening. The STOXX Europe 600 index fell by 1.7%.

The US imposed a 20% "reciprocal" rate on most EU goods on 2 April, but halved that rate a week later until 8 July to allow time for talks. It has retained 25% import taxes on steel, aluminium and vehicle parts and is threatening similar action on pharmaceuticals, semiconductors and other goods.

"This is a major escalation of trade tensions," said Holger Schmieding, the chief economist at Berenberg, 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," reports The Guardian.

EU negotiators have been locked in meetings with White House representatives since Trump's "liberation day" tariffs were first announced. Dozens of nations have been holding discussions to try to bring down their own levies before the 90-day pause elapses.

The White House has relented on many of its most onerous tariffs, including lowering total tariffs on Chinese goods from 145% to 30% after what Trump declared were constructive talks with Beijing, which lowered its retaliatory border taxes from 125% to 10% in response.

A week ago the US president appeared to acknowledge that Washington lacked the ability to negotiate deals with scores of countries at once, saying the US would instead send letters to some trading partners to unilaterally impose new tariff rates.

Perceptions of an easing back on a hardline approach to trade brought a period of calm to stock markets, but Friday's threat of a 50% levy on EU goods, plus a separate threat made the same day of 25% tariffs on iPhones made abroad, have brought an end to the peace.