*

Trump labels the EU 'difficult to deal with'

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Dollar heads for first weekly loss in five weeks

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Gold, yen and government bonds rally on haven demand

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Apple ( AAPL ) shares knocked by direct new tariff threat

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30-yr Treasury yields ease from highs, but still above 5%

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U.S. stock futures steady as tax-cuts outweigh fiscal

fears

(Updates throughout)

By Naomi Rovnick

LONDON May 23 (Reuters) - Global stocks and the dollar

tumbled on Friday after U.S. President Donald Trump unleashed

his latest unexpected trade bombshell by recommending 50%

tariffs on European Union imports from June 1.

An index tracking the U.S. currency against major peers

dropped 0.5% and headed for a 1.5% weekly drop. Futures

contracts tracking Wall Street's benchmark S&P 500 share index

fell 1.4% and those on the tech-focused Nasdaq 100

lost 1.9%.

European equity gauges also fell sharply, with Germany's DAX

losing 1.6%, Britain's FTSE 100 dropping 0.8%

and the regionwide Stoxx 600 share index 1.9% lower.

Government bonds in the U.S. and Europe rallied, however, as

the assets suddenly found favour from haven buyers after

sustaining heavy pressure this week from rising concerns about

Trump's tax cuts and the White House's ballooning debt pile.

"The European Union, which was formed for the primary

purpose of taking advantage of the United States on TRADE, has

been very difficult to deal with," Trump said in a post on his

Truth Social network.

He earlier made a separate post announcing that Apple ( AAPL )

would be hit with 25% tariffs if phones sold in the

U.S. were not made within its borders, sending the iPhone

maker's shares down almost 4% in premarket trading.

TARIFF SCARES, BUDGET WOES

This was just the latest major event in a rollercoaster week

for global markets that began with Moody's downgrading the U.S.

credit rating before the U.S. House of Representatives narrowly

approved Donald Trump's sweeping tax cuts on Thursday.

The new fiscal package Trump has dubbed his "big, beautiful

bill", is expected to add almost $4 trillion to the federal

government's $36 trillion debt pile.

Yields on long-dated Treasuries hit 19-month

highs on Thursday before dropping below 5% again on Friday in

response to fresh tariff fears.

The benchmark 10-year yield also declined by 9

basis points to 4.47%, while the price of gold, which

lures traders when economic anxiety rises and has surged in

recent months, rose a further 1.7% to $3,350 an ounce.

Canadian stock futures fell 1% and the euro

also pared strong recent gains.

Netwealth CIO Iain Barnes said he was keeping his portfolios

broadly diversified and neutral on market risk for now and

expected bond yields and investor sentiment to remain volatile.

"The uncertainty is what (the tax cuts) do to the aggregate

mix of the national finances and whether or not that, in itself,

becomes a source of volatility," he said.

He was also cautious on U.S. stocks and corporate credit, he

said.

Brent crude priced for delivery in a month's time

fell 1.1% to $62.75 a barrel.

Germany's rate-sensitive 2-year bond yield fell 10 bps to

1.73%, while benchmark 10-year Bund yield fell 9 bps to 2.55%.

.

Japan's safe-haven yen was the biggest currency gainer on

Friday, strengthening 0.9% to 142.77 per dollar.

The euro lost 0.6% to 161.43 yen.