"If that is not the case, a tariff of at least 25% must be paid by Apple to the US."Adding uncertainty to his ultimatum, Trump later said the tariff wouldn't apply to just the iPhone but also to any smartphone made outside the US.

Trump threatened to impose the costly tariffs on the European Union starting on June 1, complaining last week that the negotiations were “going nowhere.” He ended up delaying the tariffs on Sunday after speaking with the president of the European Commission.

Wall Street stocks climbed on Tuesday after U.S. President Donald Trump stepped back from his threat to impose 50% tariffs on the European Union, easing trade tensions and boosting sentiment as markets reopened after the Memorial Day break.

Just as investors thought they could take a break from tariff scares, President Trump’s threats of new levies against the EU and Apple threw trade tensions back into focus ahead of a long holiday weekend.

"These retreats are so frequent that investors should rationally expect them. So why do markets still react to the initial announcements?" UBS's Paul Donovan noted.

Wall Street's main indexes rose on Tuesday after U.S. President Donald Trump dialed back his threat of tariffs on EU imports, defusing trade tensions between the United States and the European bloc and boosting investor sentiment.

U.S. stocks were trading at session highs at midday, extending early gains triggered after President Donald Trump over the weekend said he would pause plans for a 50% tariff on European Union imports that he had announced at the end of last week from June 1 to July 9.

Apple was recouping some of its losses after President Donald Trump threatened to impose a levy on iPhones sold in the U.S.