U.S. President Donald Trump has announced plans to increase tariffs on cars and trucks imported from the European Union to 25% starting next week, marking a sharp escalation in trade tensions between the two economic powers.
The move reverses part of a 2025 agreement between Washington and Brussels that had capped tariffs on EU vehicles at 15%, in exchange for concessions on U.S. exports and regulatory alignment. Trump justified the decision by claiming the EU had failed to comply with the deal.
European officials swiftly rejected the accusations, insisting the bloc is following the agreed legislative process and warning that the U.S. risks undermining the agreement itself. The dispute comes at a time of broader geopolitical strain, including disagreements over the Iran conflict and security cooperation.
Bernd Lange, a lead MEP currently negotiating the implementation of the deal with EU member states, criticised Trump’s announcement as showing “clear unreliability”, and accused the US of repeatedly “breaking its commitments” in its trade relations with the EU.
The new tariffs are expected to hit major European carmakers such as BMW, Mercedes-Benz, and Stellantis, particularly for vehicles exported directly from Europe rather than produced in U.S. plants, which remain exempt.
Markets reacted negatively to the announcement, with auto stocks falling amid fears of a broader trade confrontation. Economists say the decision could further destabilise global trade flows, as both sides consider potential retaliatory measures.
