Donald Trump has escalated trade tensions with the European Union after announcing a steep increase in tariffs on European cars and trucks to 25%, up from the 15% rate agreed under a deal struck last year.
According to Capital Brief, Trump made the announcement on Truth Social, accusing the EU of failing to honor the agreement. “Based on the fact the European Union is not complying with our fully agreed to Trade Deal… the Tariff will be increased to 25%,” he wrote.
The new levies will not apply to vehicles manufactured in US facilities.
Speaking later at the White House, Trump said the move could push European automakers to relocate production to the United States more quickly.
EU hits back with ‘firm’ warning
The response from Brussels was swift. Bernd Lange, who leads the European Parliament’s international trade committee, strongly criticised the decision and signaled potential retaliation.
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“President Trump’s behavior is unacceptable,” Lange said. “This latest move demonstrates just how unreliable the US side is… this is no way to treat close partners.”
He added that the bloc would respond “with the utmost clarity and firmness.”
Dispute over who broke the deal
At the heart of the dispute is a disagreement over compliance with the trade agreement reached in Scotland last July. While Trump has accused the EU of failing to implement its commitments, European officials argue the US has repeatedly breached the deal.
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Lange pointed to Washington’s decision to expand metals tariffs to hundreds of additional products last August as evidence of inconsistency. Meanwhile, the EU’s ratification process is still ongoing, with final negotiations among member states not expected to conclude before June, according to Reuters.
Markets react as uncertainty grows
The announcement rattled markets, with shares of major US automakers slipping in early trading. Ford fell about 2%, while Stellantis and General Motors also recorded losses following the news.
The tariffs are being imposed under Section 232 of the Trade Act of 1964, meaning they remain unaffected by recent court rulings that struck down broader tariff measures.
The latest escalation has raised concerns about a potential trade war between the US and EU, with both sides appearing fixed.