In a sudden escalation: Trump announces 50% tariffs on Europe, and financial markets are immediately affected.

According to local and international media, trade tensions between the United States and the European Union have escalated after US President Donald Trump announced his intention to impose tariffs of 50% on imports from the European Union starting from June 1, 2025, about a week from now, causing widespread disruption in financial markets around the world.

The threat of escalating the trade war

Trump announced via his Truth Social platform that “the European Union, which was essentially established to exploit trade with the United States, has made it very difficult to reach a trade agreement,” adding that European barriers and tariffs have resulted in a US trade deficit exceeding $250 billion. He stated, “Therefore, I recommend imposing a direct tariff of 50% on the European Union, effective June 1, 2025,” exempting products manufactured within the United States from this decision, according to Reuters.

Immediate impact on financial markets

Financial markets reacted quickly to this announcement. In Denmark, the C25 index fell from a 0.7% gain to a 0.7% loss in a matter of minutes, with Novo Nordisk losing 1% and AP Møller Mærsk losing nearly 2%, according to an initial analysis by economist Ole Krohn on Danish TV2.

In the United States, S&P 500 futures predicted a 1.5% decline, while Apple shares fell by more than 2.5% in pre-market trading.

Warnings of an economic recession

Lukas Antaeus Lausen, head of global trade and investment at the Danish industry organization Dansk Industri, described Trump’s announcement as “another attempt to throw a hand grenade at global trade,” warning that it could lead to a widespread economic recession on both sides of the Atlantic, causing job losses and a decline in growth and prosperity.

He added: “If these tariffs are implemented, we will see an economic recession in Europe, Denmark and the United States alike.”.

Linguistic analysis may hold the keys to the solution.

TV2's US correspondent, Lotte Mejlhede, drew attention to Trump's wording in his post, where he used the phrase "I recommend imposing" instead of "I will impose," suggesting that there is still room for negotiations.

A cautious and watchful European reaction

The European Commission declined to comment on Trump's threat at this time, noting that its official position would be issued after a scheduled phone call between European Trade Commissioner Maros Sefcovic and his American counterpart Jamieson Greer at 5 p.m. Copenhagen time, according to Reuters.

Reporter Lise Toft Hessellund from Brussels said the European Commission is likely to respond strongly, stressing that “Europe cannot accept these tariffs or the devastating impact they could have on European companies.”.

Major companies express their concerns

For his part, Håkan Samuelsson, chairman of the board of directors of Volvo Polestar Racing, warned that consumers would pay the price for these high tariffs, which could hinder his company's car sales in the American market.

A direct threat to technology companies

Trump’s threat was not limited to the European Union, but also included major American companies such as Apple, as he threatened to impose additional tariffs of 25% if iPhones sold in the United States were not manufactured within the country.

Broader implications for economic policies

Analysts believe these developments coincide with the advancement of a broad economic bill known as the “Big Beautiful Bill,” which includes significant tax cuts but carries the risk of increasing the US budget deficit, according to Peter Bay Kirkegaard, senior advisor at Danske Industry.

Jamie Dimon, CEO of JP Morgan Chase & Co., warned that the US economy could face the risk of entering a “stagflationary” phase, a deadly combination of recession and rising prices, which was repeated during the 1970s and 1980s.

The European Union continues its attempts to calm the situation.

In an effort to contain tensions, the European Union is preparing to extend a limited trade agreement on importing lobsters from the United States, according to statements made by the chairman of the European Parliament's trade committee, Bernd Lange, to the Financial Times. Meanwhile, a spokesman for European Trade Commissioner Olof Gill confirmed that extending the agreement is linked to developments in broader trade negotiations with Washington.