AAPL, EU in New Tariff Crosshairs as ETFs Wobble
- SPY, EZU dipped ahead of the long weekend.
- AAPL, which makes up about 6% of SPY, fell nearly 3% on the day.
Stocks wobbled Friday after a pair of fresh tariff threats from President Donald Trump rattled investors, though markets ultimately seemed to brush off the news as more bark than bite.
Posting on Truth Social, Trump called on Apple to shift iPhone production to the United States, writing, “I expect their iPhone’s [sic] that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”
Tariff Threats Weigh on AAPL, EZU and More
Apple Inc. (AAPL) shares, which make up about 6% of the SPDR S&P 500 ETF Trust (SPY), fell nearly 3% on the day.
Apple holdings in ETFs—Source: etf.com & FactSet data
That weighed on SPY and similar large-cap ETFs. SPY dipped as much as 1.3% in early trading before paring losses to trade down around 0.5% midday.
Shortly after his Apple comments, Trump turned his attention to Europe. In another post, he proposed a sweeping 50% tariff on imports from the European Union starting June 1, blaming the bloc for what he described as "unfair" trade practices and a persistent U.S. trade deficit.
“I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States,” he wrote.
The iShares MSCI Eurozone ETF (EZU) initially dropped as much as 1.9% on the news but later rebounded to trade down just 0.7%. EZU remains up 24% year to date, far outpacing SPY, which is roughly flat.
Strategy or Policy Shift?
Despite the fiery rhetoric, investors appear increasingly desensitized to tariff headlines. Trump has frequently used aggressive trade threats as negotiating leverage—most notably in his dealings with China. Many traders seem to believe the latest moves are part of a broader negotiation strategy rather than a guaranteed policy shift.
Treasury Secretary Scott Bessent echoed that view Friday, saying he hoped the tariff threat would “light a fire under the EU” to reach a deal.
Markets are also watching the courts, where several of Trump’s past tariffs are being challenged. The U.S. Court of International Trade is expected to weigh in soon on whether some of the tariffs, which critics argue were arbitrarily applied, overstep presidential authority. Legal experts anticipate that any ruling will ultimately be appealed to the Supreme Court.
For now, investors are taking the view that the worst-case trade scenarios may not come to pass.
