US increases EU car taxes amid trade disputes

Donald Trump has announced plans to increase tariffs on cars and trucks imported from the European Union to 25%, escalating trade tensions between the two sides.

The US president disclosed the move on Friday, accusing the EU of failing to comply with a previously agreed trade deal reached in 2025. Under that agreement, tariffs on European automobiles had been capped at 15%, offering some relief compared to the broader 25% duties imposed on other global partners.

However, Trump said the bloc’s alleged non-compliance has forced a rethink.

“Based on the fact that the European Union is not complying with our fully agreed trade deal, next week I will be increasing tariffs charged to the European Union for cars and trucks coming into the United States,” he said.

The planned increase comes despite earlier legal and policy shifts in Washington. While a US Supreme Court ruling had rolled back several global tariffs earlier in the year, sector-specific duties such as those on automobiles remained unaffected.

In response, an EU spokesperson signalled the possibility of retaliation, warning that the bloc would take necessary steps to protect its economic interests if the US follows through with the tariff hike.

The development adds uncertainty to an already fragile transatlantic trade relationship. European lawmakers had only recently given conditional approval to the trade agreement, with additional safeguards still under negotiation among member states.

Analysts say the move could hit major EU exporters, especially Germany, hard, given the country’s heavy reliance on vehicle exports to the US market. According to industry data, the United States remains one of the largest destinations for European automobiles, accounting for over 20% of exports.

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Business groups have also raised concerns about unpredictability in US trade policy. Dan Anthony, head of a coalition of small businesses, said such sudden tariff threats create instability for companies trying to plan operations and manage costs.

With both sides leaving the door open for further action, the coming weeks could determine whether tensions escalate into a broader trade dispute or return to negotiation.