US to hike tariff rate on EU auto imports to 25%, Trump says

President Donald Trump said he was raising tariffs on cars and trucks from the European Union to 25%, claiming that the bloc had failed to fully comply with a trade agreement negotiated with the U.S.

“I am pleased to announce that, 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 said Friday in a social media post. “The Tariff will be increased to 25%.”

Trump said the levies would not apply to automobiles built in U.S. facilities. “It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF,” the president said.

Speaking to reporters at the White House on Friday, Trump reiterated his claim that the EU was “not adhering” to their agreement, without providing more details, and said the levies would force their automakers to “move their factory production much faster” to the U.S.

The decision injects fresh volatility into an auto industry that’s still adapting to Trump’s whipsawing trade policies from last year that significantly increased costs and squeezed profits for carmakers and their suppliers. Trump has pushed automakers to expand their U.S. manufacturing operations by imposing tariffs on vehicles and parts that cross the border, even from countries with prior trade agreements.

A number of prominent European automakers have assembly plants in the U.S., including Volkswagen AG, Mercedes-Benz Group AG and BMW AG. Stellantis NV, owner of the Chrysler and Dodge brands, has a significant U.S. footprint as well, mostly focused on brands such as Jeep and Ram.

Trump’s announcement Friday would “threaten the progress that has already been made to open EU markets and grow the U.S. auto industry,” said Jennifer Safavian, president of Autos Drive America, a trade association representing automakers based outside the U.S. “We urge the administration and the EU to uphold the agreement made last year and work together to find a swift resolution.”

U.S. shares of Stellantis, which imports Alfa Romeo, Fiat and Maserati models into the U.S. from Europe, pared earlier an earlier decline to trade down 1.6% as of 2:11 p.m. in New York. U.S. depositary receipts of VW also fell.

Higher tariffs risk additional pressure on German automakers such as BMW and Mercedes-Benz. Although those companies use the U.S. as a major hub for SUV production and export, they still import other models such as the BMW 3 Series and Mercedes-Benz S Class sedans.

BMW told investors in March it sees little room for improving carmaking profitability this year due to tariffs and intensifying competition in China. A BMW spokesperson declined to comment. 

The ratcheting up of tariffs on Europe comes as officials from the U.S., Mexico and Canada prepare to review their trade agreement this summer. Automakers have been pushing the administration for more tariff relief, and some foreign manufacturers who chose not to comply with content rules in the pact Trump signed in 2020 have faced double-digit duties on some models.

Europe tensions

Trump’s decision renews a contentious trade fight with a major economic bloc even as the Iran war and the resultant spike in energy prices place fresh strains on the global economy.

Bernd Lange, who chairs the European Parliament’s trade committee, said that Trump’s behavior was unacceptable and that the EU is honoring the deal.

“The U.S. has repeatedly breached the agreement,” Lange told Bloomberg on Friday, referring to U.S. tariffs on steel and aluminum imports. “This latest move demonstrates just how unreliable the U.S. side is.”

Lange reiterated that parliament is drafting legislation to ratify the trade deal with the U.S. and hope to finalize it in June.

Under their trade deal, the EU had agreed to erase levies on U.S. industrial goods in exchange for a 15% tariff ceiling on most EU products. The bloc had accepted the lopsided deal in the hopes of keeping Trump engaged in Ukraine and avoiding a full rupture in trade relations.

Trump did not specify how he believed the EU had failed to honor their trade pact on Friday, but the agreement had faced challenges, complicating negotiations over implementation. While the two sides reached their agreement in July, EU lawmakers are yet to fully ratify the pact as they seek further amendments.

A key sticking point has been metals tariffs. In August, the U.S. widened a 50% tariff on steel and aluminum to hundreds of new products. The move led to claims the U.S. was violating recent commitments. Companies faced a difficult task calculating the tariffs, which were based on the percentage of these metals in their products.

EU lawmakers then twice paused the deal’s ratification - once after Trump threatened to take Greenland, a Danish territory, and again after the U.S. Supreme Court invalidated the president’s global tariff regime. 

More recently, however, the two sides had expressed a desire to finally adopt the trade deal, with the U.S. agreeing to change how it calculated the broadened metals tariff.

With assistance from Richard Clough.

Copyright 2026 Tribune Content Agency. All Rights Reserved.

This story was originally published May 1, 2026 at 2:52 PM.