Trump hikes EU auto tariffs to 25%, bloc vows ‘firm’ response
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The news: US President Donald Trump announced that tariffs on EU cars and trucks would rise to 25% next week, up from the 15% rate agreed under a trade deal struck with the bloc last July at Turnberry, Scotland.
What they said: Trump made the announcement in a Truth Social post, saying the levies would not apply to vehicles built in US facilities.
“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,” Trump wrote. “The Tariff will be increased to 25%.”
Trump then told reporters at the White House the higher tariffs would force European carmakers to move their factory production to the US more quickly.
Bernd Lange, chair of the European Parliament’s international trade committee argued it was the US that had repeatedly breached the agreement, pointing to Washington’s decision to widen metals tariffs to hundreds of new products last August.
“President Trump’s behaviour is unacceptable,” Lange said.
“This latest move demonstrates just how unreliable the US side is. We have already witnessed these arbitrary attacks from the US in the case of Greenland; this is no way to treat close partners. Now we can only respond with the utmost clarity and firmness, drawing on the strength of our position.”
The context: The EU’s ratification of the deal is indeed not yet complete, and the Financial Times notes US officials had grown frustrated by the slow pace at which the bloc had moved to implement its side of the agreement.
EU lawmakers who approved the deal earlier this year had set conditions including reversing it if Trump imposed new levies. According to Reuters, the process of negotiating final texts among EU countries is not expected to be completed before June.
The tariffs fall under Section 232 of the Trade Act of 1964 and are not affected by the Supreme Court ruling that struck down Trump’s broader tariff regime.
The numbers: Shares of Ford fell 2%, Stellantis dropped 1.7% and General Motors declined 1.1% following the announcement.
The sources: Donald Trump post, Reuters, Financial Times, Bloomberg
