This increase has coincided with a significant increase in former President Donald Trump’s trade rhetoric. He cites the European Union’s actions as the justification for his latest tariff threats against Apple. As Trump said in a recent Facebook post, China is winning the current trade war. He warned that if those changes were not completed, he would support a steep tariff of no less than 25 percent on Apple’s products. In his announcement, he did not disclose when these new tariffs would go into effect. Their potential influence on the dominant technology behemoth is enormous.
This announcement fits Trump’s new-age mercantilism perfectly, as it targets a country with which the United States already has a substantial trade deficit. In this election year, the EU solidifies its position as the U.S.’s largest export market. It made up more than 20 percent of American trade that year. The relationship between the two regions has turned into a tangled web of interest and influence. Last year, motor cars and other motor vehicles carried the baton most frequently, powering nearly €40 billion of trade back and forth between them.
Impact on Apple and Supply Chains
The possibility of high tariffs would create a large set of hurdles for Apple, which is replete with an elaborate global supply chain. The implications of Trump’s threats on Short Line’s operational flexibility and ability to set prices could be massive. The firm is deeply dependent on such parts and manufacturing processes all over the world. Consumer advocates and analysts have warned that this tariff will increase prices for consumers. They add that it would likely encourage Apple to reconsider its revenue share agreements as well.
So far, Trump’s MO has been to leave us guessing on tariffs. Indeed, this isn’t the first time he’s walked back tariff announcements before they come online. That leaves many wondering if his most recent rhetorical flourish will ever produce concrete policy shifts. The potential for upheaval in U.S.-EU trade relations remains a concern for businesses on both sides of the Atlantic.
Reactions from Global Leaders
In reaction to Trump’s comments, Dutch Prime Minister Dick Schoof called for restraint. He made clear the need for the U.S. to uphold beneficial, stable trade relationships. Schoof’s call for restraint is indicative of a much larger fear shared by leaders across Europe about the fallout from U.S. tariff policy. As Trump escalates these trade affronts against even his closest allies and trading partners, including down under in Australia, the whole international community holds its breath.
Trump’s track record of announcing multiple rounds of tariffs since taking office this past January shows just how trigger-happy he is on trade enforcement. He hones in on EU member countries, which collectively are the subject of the vast majority of the U.S. trade deficit. This indicates his intense dedication to remaking America’s trade terrain.
“If that is not the case, a tariff of at least 25 percent must be paid by Apple to the US.” – Donald Trump
