After a brief spell of optimism, investors and business leaders were reminded Friday that the President Donald Trump’s trade policies remain as unpredictable and aggressive as ever. As originally reported by Bloomberg, hopes for a rollback in tariffs—stoked by recent agreements with the UK and China—were dashed when Trump delivered a fresh volley of threats, reigniting fears of a prolonged global trade war.
Speaking from the Oval Office, Trump announced potential new tariffs targeting the European Union, including a 50% levy on EU goods and a 25% tax on smartphones if companies like Apple Inc. and Samsung Electronics Co. do not relocate production to the United States. “I just said it’s time that we play the game the way I know how to play the game,” he told reporters.
The remarks sent shockwaves through financial markets. Global equities fell, the U.S. dollar slumped to its lowest level since 2023, and corporations were left bracing for renewed instability. As Bloomberg noted, business leaders have once again been forced to confront the likelihood that volatility is not a phase but a permanent fixture of Trump’s economic strategy.
“Today’s news that Trump is threatening enormous tariffs on the EU and is singling out Apple as a firm are examples of what we should expect for the next two months, if not for the rest of the year,” said Marcus Noland, executive vice president of the Peterson Institute for International Economics. “Peace has not broken out.”
Despite securing a major legislative win earlier in the week—his tax and spending bill passed the House following intense lobbying—Trump remained defiant on trade. While a White House official stated that the administration hopes to ink more agreements during a 90-day pause on tariffs announced April 2, Friday’s escalation hinted at deeper challenges.
Commerce Secretary Howard Lutnick, in remarks at an Axios event, characterized the EU as “very difficult,” while Treasury Secretary Scott Bessent described the EU as an “exception” in trade talks. Still, Bessent assured that several deals are close to finalization, including with India.
Yet uncertainty looms. The EU has prepared countermeasures targeting €95 billion ($107 billion) of U.S. exports if negotiations fail. And while some tariffs were temporarily lowered, most trading partners are still facing a 10% baseline duty—with little clarity on when or if that will change.
Goldman Sachs, in a May 14 note cited by Bloomberg, projected that the effective U.S. tariff rate could rise by 13 percentage points this year—reaching its highest level since the 1930s. However, the bank questioned whether these tariffs would achieve their intended goal of boosting domestic production.
Trump’s willingness to renege on past agreements has also alarmed international observers. “It’s really quite extraordinary that we had free trade agreements with some of these countries — Korea, Australia — and they’re just getting hit with tariffs,” said Noland. “His willingness to tear up previous agreements and ignore them has to be highly concerning for other countries.”
As negotiations with nations like India, Japan, Vietnam, and Israel continue, the prospect of new trade flare-ups remains high. While some temporary relief may materialize, the prevailing sentiment—as captured by Bloomberg—is that Trump-era uncertainty is not over. If anything, it may just be ramping up again.
