The United States has raised the tariff on European‑made cars and trucks from 15% to 25%, citing the European Union’s failure to fully implement a trade agreement reached last summer. President Donald Trump announced the increase on his TruthSocial platform, stating that the EU “is not complying with our fully agreed‑to Trade Deal” and that the higher duty will take effect next week. He added that manufacturers that relocate production to the United States would be exempt from the hike.
The pending deal, concluded in July after a short trade dispute, still requires approval through the EU’s “trilogue” process, which involves the European Parliament, the European Commission and the Council of EU leaders. Although the European Parliament voted in late March to move the agreement forward, ratification has not been completed, leaving the arrangement in a bureaucratic limbo.
Critics within the EU have long described the accord as disadvantageous. Former EU foreign policy chief Josep Borrell called the deal “unfair from the beginning,” noting that Washington imposed a 15% tariff on EU goods while the EU reduced its own tariffs on American products. The announcement of the tariff increase prompted a swift response from the EU’s International Trade Committee chair, Bernd Lange, who described Washington’s action as “untrustworthy” and warned that the bloc would respond “with utmost clarity and firmness,” though he did not specify any retaliatory measures.
The tariff hike adds a further 10 percentage points to the cost of importing European automobiles into the United States, potentially affecting manufacturers such as Volkswagen, BMW, Mercedes‑Benz, Renault and PSA. The move also raises questions about the future of transatlantic trade relations and could prompt European carmakers to reconsider supply‑chain strategies, including the possibility of expanding production facilities in the United States to avoid the higher duty.
The United States’ decision underscores the importance of completing the pending trade agreement. Until the trilogue concludes and the deal is ratified, both sides risk escalating trade tensions that could impact a range of industries beyond automotive, from agriculture to technology. Further developments are expected as EU institutions continue negotiations and as both parties assess the economic implications of the increased tariffs.
