Trump Threatens 25% Tariffs on European Cars
US President Donald Trump has stated that he will increase import tariffs imposed on the European Union for cars and trucks to 25%. He cited the reason for this tariff hike as a violation of the agreed trade agreement.
“Based on the fact that the European Union is not complying with the fully approved trade agreement, next week I will raise the tariffs imposed on the European Union for cars and trucks entering the United States,” he wrote on Truth Social, quoted by CNBC International on Saturday (2/5/2026).
“The tariffs will be raised to 25%. It is fully understood and agreed that if they produce cars and trucks in factories in the US, there will be NO TARIFFS,” he added.
At that time, Trump used the International Emergency Economic Power Act (IEEPA) to establish new import tariffs last year.
However, the US Supreme Court ruled in February that most of Trump’s “reciprocal” tariff agenda was illegal. The court, by a 6-3 majority, did not grant the president authority to impose tariffs.
Shortly after that ruling, Trump stated that he had signed an executive order establishing new global tariffs of 10% to replace the IEEPA-based tariffs.
Although those tariffs had a 150-day limit under Section 122 of the Trade Act 1974. Trump then stated that he would raise those global tariffs to 15%.
The European Union warned in February that its trade agreement with the US could be threatened after the new tariffs were announced, and delayed a planned vote on the agreement.
The European Union stated that it is following standard legislative practices and continues to provide the latest information to the US government.
“We maintain close communication with our partners, including as we also seek clarity on US commitments,” said a European Commission spokesperson.
“We remain fully committed to a predictable and mutually beneficial transatlantic relationship. If the US takes steps that are not in line with the joint statement, we will retain options to protect European Union interests.”
A White House official said in a statement on Friday that the European Union has failed to make substantial progress on the agreed commitments in the trade agreement between the two parties.
“The White House has always emphasised that the President has the right to adjust tariffs if our trade agreement partners fail to comply with their commitments,” the official said.
The Trump administration last year widely implemented 25% tariffs on vehicles and certain automotive parts imported into the US on national security risk grounds under Section 232. Those tariffs remain in effect, and the White House stated that Trump will raise tariffs on the European Union based on those provisions.
The European car manufacturers most affected by this tariff change are likely to be Mercedes-Benz, BMW, and Volkswagen, which import most of the vehicles they sell in the US from their factories in Europe.