Trump Set to Raise EU Car Tariffs to 25% and Urge Shift to U.S. Production

TL;DR: President Trump said he will raise the tariff on European Union cars and trucks from 15% to 25% starting next week. He added that building those vehicles in U.S. plants would exempt them from the new tax.

The July trade agreement negotiated at Trump’s Turnberry golf course set a baseline 15% duty on most EU goods, including automobiles, after a period of heightened tensions. The deal was later ratified by the European Parliament despite an earlier suspension linked to unrelated disputes over Greenland.

Trump announced on Truth Social that the new 25% tariff will take effect next week, up from the current 15% rate established in the July trade agreement. He said that any cars or trucks manufactured in U.S. factories would be exempt from the duty. He also noted that billions of dollars are being invested in American car and truck plants, describing the influx as a record in the industry’s history.

The higher duty could raise costs for EU automakers exporting to the United States, potentially pressuring them to shift production overseas to avoid the tax. It may also intensify transatlantic trade friction and influence supply‑chain decisions across the Atlantic. Because the tariff relies on a separate legal mechanism from the previously struck‑down Liberation Day measures, it is less likely to be overturned by the courts.

Watch for responses from the European Commission, possible renegotiation of the July deal, and any announcements from major automakers about shifting investment toward U.S. facilities.