Stock markets are down as Trump once again escalated rhetoric on trade, threatening both Apple and the EU if they don’t comply.
The U.S. trade tensions with the rest of the world are once again escalating, causing the markets to sink. On Friday, May 23, the Dow Jones was trading at 41,624 points, down 234 points or 0.56%. The S&P 500 was at 5,802 points, down 0.69%, while the tech-heavy Nasdaq was at 18,742.20, losing 0.97%.
The market downturn came after Donald Trump once again escalated his rhetoric on tariffs. The U.S. President threatened Apple with increased tariffs if the company did not pledge to make its iPhones in the U.S.
“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. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S,” Trump wrote.
Manufacturing iPhones in the U.S. would substantially increase their costs to consumers. According to Bloomberg, manufacturing costs could go up a much as 90%, making a shift to the U.S. manufacturing unlikely even if tariffs took effect. For this reason, Apple stock fell 2.6% following Trump’s statement.
Trump escalates trade war with the EU
Moments later, Trump also expressed frustration with trade talks with the European Union. He stated that talks are “going nowhere,” and threatened a 50% tariff on all EU goods coming to the U.S. starting on June 1.
The escalating trade war is causing concern on Wall Street. Combined with likely retaliatory measures by other countries, U.S. tariffs threaten to unravel the interconnected global economy. Many major U.S. businesses, including Apple and Tesla, rely on foreign markets for a significant share of their revenue.
