Trump Says Will Raise US Tariffs On EU Cars To 25%

2026-05-02 04:17:22

(MENAFN- Khaleej Times) US President Donald Trump said Friday that he will hike US tariffs on cars and trucks from the European Union next week, charging that the bloc is not complying with an earlier trade deal.

The pact, which was struck last summer, had capped the US tariff on EU autos and parts at 15 per cent, which is lower than the 25-per-cent duty that Trump imposed on many other trading partners.

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These sector-specific duties were not affected by a Supreme Court ruling earlier in the year that struck down a swath of Trump's global levies.

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But the US leader said Friday: "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."

He told a Florida event later Friday that Washington had informed Germany of his threat because "they and other European nations have not adhered to our trade deal."

He accused German automakers like Mercedes-Benz and BMW of ripping off Americans.

Trump's 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 vehicle tariff, as it is responsible for a significant amount of EU auto exports.

Reacting to the announcement, a European Commission spokesperson told AFP: "Should the US take measures inconsistent with the joint statement, we will keep our options open to protect EU interests."

The spokesperson added that the bloc is implementing its commitments "in line with standard legislative practice" and keeping the Trump administration updated during this process.

Last July, the EU had laid the groundwork for possible retaliation if talks with Washington fell through - preparing a list of US goods that could be targeted.

'Light a fire'

"President Trump has clearly lost patience with EU efforts to implement its commitments under the bilateral trade deal concluded months ago," former US trade official Wendy Cutler told AFP.

She said Trump appeared to be "hoping to light a fire under Brussels to accelerate its domestic procedures."

His threats to the EU are reminiscent of a similar move against South Korea months ago, added Cutler, who is now senior vice president at the Asia Society Policy Institute.

In late March, EU lawmakers gave their green light to the bloc's tariff deal with Trump, but with conditions.

A large majority of EU lawmakers agreed to cut EU tariffs on some US imports, as a first step towards implementing the 2025 deal, but they also sought additional safeguards.

Although the European Parliament has given its conditional approval to the EU-US trade pact, before the deal is implemented by the bloc, it still needs to be negotiated with EU states.

The new threat on European cars "explain why many small businesses expect to be cautious" with Trump's tariffs, said Dan Anthony, who heads "We Pay the Tariffs," a coalition of nearly 1,200 small businesses.

"You never know what might trigger the next tariff threat," Anthony added in a statement.

In April, EU trade chief Maros Sefcovic was in Washington to meet with counterparts including US Commerce Secretary Howard Lutnick and trade envoy Jamieson Greer.

At the time, he said the EU was also seeking more progress in easing the effects of still-steep US steel tariffs, adding that talks were going in a positive direction.

The United States is the second largest market for new EU vehicle exports, after the United Kingdom, according to a 2025 fact sheet by the European Automobile Manufacturers' Association.

Over a fifth of EU vehicle exports went to the United States.

Germany alone exported some 450,000 vehicles to the United States in 2024, according to the VDA industry group. But that figure has since slipped.