Published on •Updated
US President Donald Trump said on Friday that he will increase the tariffs charged on cars and trucks from the European Union to 25% next week, a move that could further jolt a global economy already rattled by the Iran war.
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Trump said in a social media post that the EU “is not complying with our fully agreed to trade deal.”
He gave no further reasons for the planned hike, but the announcement comes at a particularly tense time for relations between the White and the EU.
On Thursday, Trump renewed criticism of German Chancellor Friedrich Merz, telling him to focus on ending the Ukraine war instead of “interfering” on Iran.
Germany would likely be hit hard by a sharp tariff on cars and parts, as it is responsible for a significant amount of EU auto exports.
He also referred to European allies Spain and Italy as “absolutely horrible” for their refusal to get involved in the Iran war.
Trump and European Commission President Ursula von der Leyen agreed to the trade deal last July which set a 15% tariff on most goods.
Both the US and the EU had previously confirmed their commitment to preserving the trade framework, known as the Turnberry Agreement, which was named after Trump’s golf course in Scotland.
But the status of the 2025 deal was first cast into doubt after the Supreme Court ruled this year that the Republican president lacked the legal authority to declare an economic emergency and charge tariffs on EU goods.
The initial agreement had been a tariff ceiling of 15% on goods from the EU, but the Supreme Court ruling reduced that to 10% as the Trump administration launched a new set of import taxes based on other laws.
The Trump administration is in the middle of investigations on trade imbalances and national security risks to impose a new tariff regime, which could ultimately put the agreement with the EU at risk of violation.
The EU had said it expected the bilateral deal would save European car manufacturers between €500-600 million a month.
The value of EU-US trade in goods and services amounted to €1.7 trillion in 2024, or an average of €4.6 billion a day, according to EU statistics agency Eurostat.
“A deal is a deal,” the European Commission said in February after the Supreme Court ruling.
“As the United States’ largest trading partner, the EU expects the US to honor its commitments set out in the Joint Statement, just as the EU stands by its commitments. EU products must continue to benefit from the most competitive treatment, with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed.”
Additional sources • AP, AFP