President Donald Trump said Friday that he will increase the tariffs charged on cars and trucks from the European Union next week to 25%, a move that could jolt the world economy at a fragile moment.
Trump said in the post that the EU “is not complying with our fully agreed to Trade Deal”, though he did not flesh out his objections in the post.
A trade deal, which was struck last summer, had capped the US tariff on EU autos and parts at 15 percent, which is lower than the 25-percent duty that Trump imposed on many other trading partners.
But in a post on his Truth Social platform, Trump on Friday said, “Based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States,” adding, “the Tariff will be increased to 25%”.
President Donald Trump on May 1, 2026 said he will hike US tariffs on cars and trucks from the European Union. © Screengrab Truth Social
Trump did not give a further reason for the planned hike, but the announcement came a day after his renewed criticism of German Chancellor Friedrich Merz.
Trump told Merz to focus on ending the Ukraine war instead of “interfering” on Iran.
Germany would likely be hit hard by a sharp tariff on cars and parts, as it is responsible for a significant amount of EU auto exports.
Trade deal reached last year
Trump and European Commission President Ursula von der Leyen had agreed to the trade deal last July. It set a 15% tariff on most goods.
Both the US and the EU had previously confirmed their commitment to preserving the trade framework, known as the Turnberry Agreement, which was named after Trump’s golf course in Scotland.
Read moreEU car industry sees relief – and pain – in US trade deal
But the status of the 2025 deal was first cast into doubt after the Supreme Court this year ruled that the Republican president lacked the legal authority to declare an economic emergency and charge tariffs on EU goods.
The initial agreement had been a tariff ceiling of 15% on goods from the EU, but the Supreme Court ruling reduced that to 10% as the Trump administration launched a new set of import taxes based on other laws.
The tariffs hit at a moment when the Iran war has crushed the world economy with expectations of slower growth and higher inflation, as oil and natural gas prices have risen due to the effective closure of the critical Strait of Hormuz after strikes by the US and Israel began at the end of February.
At the same time, Trump faces political pressure in the U.S. going into November’s midterm elections because of rising levels of inflation. Trump, a Republican, returned to the White House last year on the explicit promise that he could quickly tame prices that jumped in the aftermath of the government’s response to the coronavirus pandemic, but higher energy costs pushed annual inflation in March to 3.3%, which was higher than what he had inherited.
Just 30% of US adults approved of Trump’s handling of the economy, according to the latest poll by The Associated Press-NORC Center for Public Affairs Research.
Neither EU nor Trump administration officials responded to questions about the tariff increase and whether or how the agreement had been violated. But Trump has had a testy relationship with Europe, having threatened earlier this year to take control of Greenland and later blasting NATO allies for not providing more support to the US for the Iran war.
‘Handshakes and winks and hopes that Trump doesn’t get mad’
To raise tariff rates, Scott Lincicome of the libertarian Cato Institute’s Center for Trade Policy Studies said, the president would likely use Section 232 of the Trade Expansion Act of 1962, which allows for duties on national security grounds.
Trump imposed 25% Section 232 tariffs on foreign autos in March 2025, but those tariffs were then lowered as part of the trade framework with the EU.
Lincicome also said Trump’s threats are “just another example of why these trade deals are vapourware. They all rely on handshakes and winks and hopes that Trump doesn’t get mad about something.’’
He said that as best he could tell the Europeans “were basically complying with the framework”. The European Parliament has been moving slowly on the agreement but was expected to finish work on the deal next month.
The EU had said it expected the bilateral deal would save European automakers about 500 million to 600 million euros ($585 million to $700 million) a month.
The value of EU-US trade in goods and services amounted to 1.7 trillion euros ($2 trillion) in 2024, or an average of 4.6 billion euros a day, according to EU statistics agency Eurostat.
“A deal is a deal,” the European Commission said in February after the Supreme Court ruling. “As the United States’ largest trading partner, the EU expects the US to honour its commitments set out in the Joint Statement — just as the EU stands by its commitments. EU products must continue to benefit from the most competitive treatment, with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed.”
(FRANCE 24 with AFP and AP)
