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Tariff drama is back.

From Marketplace, I'm Sabree Beneshore, in for David Brancaccio.

President Trump says he wants 50% tariffs on goods from the European Union starting

June 1st, saying talks with the EU are going nowhere.

He also wants import taxes specifically on iPhones that aren't made in the U.S.

Markets tanked on the news.

Bond yields came down to Christopher Lowe is chief economist at FHN Financial in New York and joins us.

Hi, Chris.

Good morning, Sabri.

Why did markets react so negatively to this tariff news?

Just about every big American company does a ton of business in Europe.

So the economy is quite sensitive to tariff rates that would be high enough to limit economic activity between the U.S.

and Europe. And then, of course, the Apple threat, it's one of the bigger market caps in the U.S. stock market.

So a 25% tax on all of its goods, that would be really significant.

So why then are bond yields falling? Why are interest rates falling?

Well, so why are interest rates falling? That's sort of the big question. And I think it's because

these two threats put the possibility of recession back on the table just what? About two and a half

weeks after we began to feel like maybe the U.S. could dodge that bullet. Christopher Lowe is chief

economist at FHN Financial in New York.

...