Trump to Hike Tariffs on EU Cars to 25% in Sharp Trade Escalation

🕐 May 2, 2026 | US-EU trade relations face fresh shockwaves

U.S. President Donald Trump announced on May 1 that he will raise tariffs on cars and trucks imported from the European Union from the current 15% to 25%, marking a sharp escalation in trade tensions between Washington and Brussels.

Trump’s Accusation

Trump accused the EU of “not complying with our fully agreed to trade deal” in a post on Truth Social, but did not elaborate on how the bloc had allegedly violated the agreement.

“I am pleased to announce that… next week I will be increasing Tariffs charged to the European Union for Cars and Trucks,” Trump said on Friday. He also urged European automakers to shift production to the United States.

“It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF,” he wrote.

Background: A Fragile Trade Deal

The US-EU trade deal, negotiated last July at Trump’s Turnberry golf course in Scotland, set levies on most European goods at 15%. This was a reprieve from the 30% tariffs Trump had threatened as part of his “Liberation Day” wave of tariffs in April.

In exchange, Europe had agreed to invest in the US and implement reforms expected to boost American exports.

However, amid tensions over Trump’s threats to annex Greenland — a self-governing Danish territory — the European Parliament suspended approval of the deal in January. The parliament later added a clause stating the agreement could be suspended if the Trump administration is deemed to have “undermined the objectives of the deal, discriminated against EU economic operators, threatened member states’ territorial integrity, foreign and defence policies, or engaged in economic coercion.”

The deal was ultimately approved by the European Parliament in March.

Notably, Trump’s “Liberation Day” tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), have since been ruled illegal by the Supreme Court, with firms that paid up now seeking refunds. However, tariffs affecting cars fall under a different legal process and are not impacted by the Supreme Court ruling.

Market Impact

By targeting the automotive sector, Trump has chosen a particularly sensitive target, as car manufacturing makes up a significant proportion of Europe’s economy. Major European economies such as Germany and France had previously rejected US plans to adjust tariffs on a wide range of goods.

Analysts warn this move could further heighten global trade uncertainty, with potential knock-on effects for European automakers and US consumers alike.

Source: BBC News