Stocks fall as Trump threatens tariffs on EU, Apple

Equities closed sharply lower on Friday as President Donald Trump reignited trade war fears, threatening steep tariffs on European Union goods and targeting Apple with a potential 25% levy.

Wall Street's main indexes spent the entire session in the red. The biggest loser of the three was the Nasdaq, weighed down by a three percent fall in Apple.

Paris and Frankfurt ended with losses of around 1.5%, with shares in luxury and car companies taking a hit after Trump threatened 50% tariffs on EU goods.

London's FTSE 100, which initially rose, also ended in the red.

Germany's DAX had also been higher earlier in the day as German economic growth data was revised up.

"What is somewhat of a surprise is the fact that the EU will now face a considerably higher tariff rate than China, an almost unthinkable scenario just a matter of weeks ago," said Lindsay James, investment strategist at Quilter.

"It is highlighting that much of this policy is designed to be punitive, rather than having any economic credibility to it."

Oil prices rebounded, meanwhile, having earlier dropped by around one percent, while the dollar remained under pressure.

Trump's new threats revived investor concerns about his trade policies after a recent deal with Britain and a tariffs truce with China.

"All the optimism over trade deals wiped out in minutes -- seconds, even," said Fawad Razaqzada, market analyst at StoneX.

Trump said on his Truth Social platform that he was "recommending a straight 50% Tariff on the European Union" from June 1 as "discussions with them are going nowhere!"

"The EU is one of Trump's least favorite regions, and he does not seem to have good relations with its leaders, which increases the chance of a prolonged trade war between the two," said Kathleen Brooks, research director at trading platform XTB.

The US president had announced 20 percent tariffs on EU goods last month but suspended the measure to give space for negotiations.

Trump, however, maintained a 10 percent levy on imports from the 27-nation bloc and nearly every other nation around the world, along with 25 percent duties on the car, steel and aluminium industries.

He also threatened on Friday to hit Apple with a 25% tariff if its iPhones are not manufactured in the United States.

Trump initially said the tariff would apply only to Apple -- an unusual move in singling out a specific company in trade policy.

However, he later expanded the threat to include all smartphone manufacturers, telling reporters the levy could also hit Samsung.

Trump's social media outburst rocked stock markets which had steadied following losses over concerns about the ballooning US debt and rising US borrowing costs.

Key figures at around 2050 GMT

New York - Dow: DOWN 0.6% at 41,603.07 (close)
New York - S&P 500: DOWN 0.7% at 5,802.82 (close)
New York - Nasdaq Composite: DOWN 1.0% at 18,737.21 (close)
London - FTSE 100: DOWN 0.2% at 8,717.97 (close)
Paris - CAC 40: DOWN 1.7% at 7,734.40 (close)
Frankfurt - DAX: DOWN 1.5% at 23,629.58 (close)
Tokyo - Nikkei 225: UP 0.5% at 37,160.47 (close)
Hong Kong - Hang Seng Index: UP 0.2% at 23,601.26 (close)
Shanghai - Composite: DOWN 0.9% at 3,348.37 (close)
Euro/dollar: UP at $1.1369 from $1.1281 on Thursday
Pound/dollar: UP at $1.3535 from $1.3412
Dollar/yen: DOWN at 142.57 yen from 144.01 yen
Euro/pound: DOWN at 83.96 pence from 84.06 pence
Brent North Sea Crude: UP 0.5% at $64.78 per barrel
West Texas Intermediate: UP 0.5% at $61.53 per barrel