Trump Plans to Raise EU Auto Tariffs to 25% Over Trade Deal Dispute

The United States and the European Union reached a trade agreement last summer that limited U.S. duties on European automobiles and parts to 15 percent. That ceiling was lower than the 25 percent duty Trump had already imposed on several other trading partners. German automakers, which supply a large share of EU vehicle exports, stand to feel the biggest impact if the tariff rises. The administration has argued that the EU's subsidies to its aircraft industry also violate the agreement, though no formal ruling has been issued.

On Friday, Trump posted on his Truth Social platform that the tariff on EU cars and trucks will be increased to 25 percent. He said the increase will take effect next week because the EU is not complying with the fully agreed-to trade deal. The earlier pact had set the maximum U.S. tariff on EU autos and parts at 15 percent. The announcement came a day after Trump told German Chancellor Friedrich Merz to focus on ending the Ukraine war instead of commenting on Iran.

Higher tariffs could raise the cost of importing European vehicles into the United States, potentially leading to higher prices for consumers. U.S. automakers might gain a price advantage, while European exporters could see reduced sales in the American market. The EU may respond with its own measures or bring a complaint to the World Trade Organization. Market analysts will watch for any official EU reaction and for shifts in auto stock prices. Industry analysts note that higher tariffs could protect roughly 150,000 U.S. auto jobs while putting a similar number of EU jobs at risk.