Newly announced tariffs on EU and Apple will harm U.S. economy, raise costs for consumers

This morning, President Trump announced a 50 percent tariff on the European Union starting on June 1 and a 25 percent tariff on iPhones if Apple does not move production to the United States.

CEI senior economist Ryan Young said:

“Just when we thought there was some tariff stability, President Trump has undermined it by announcing a 50 percent tariff on EU-made products, and a 25 percent tariff on iPhones unless production moves to America. Look for more bad news from financial markets that are already dealing with a US debt downgrade, rising bond yields, and a shrinking US economy.

“The EU tariff is likely intended to jump-start a stalled agreement along the lines of recent UK and China tariff agreements. Without an agreement, Europe might go through with its planned retaliatory tariffs, as happened with China. To match this latest increase, its retaliations may even be larger than first planned.

“The economic consequences could be serious. US tariffs on Chinese products peaked at 145 percent before an agreement was reached on 30 percent tariffs, but not until after the spat slowed down shipping traffic, leading to likely product shortages in the US in the coming weeks and months. We will now see if something similar happens with Europe.

“The 25 percent iPhone tariff will accomplish nothing. A US-made iPhone would cost roughly $3,500, or several hundred percent more than current prices. Apple would be better off just paying the 25 percent tariff.”

More from CEI:

• Ryan Young for National Review: The Tariff Roller Coaster Is Playing Tricks on You
• Consumer sentiment down nearly 30 percent, tariffs and inflation to blame: CEI analysis