Trump Announces 25% Tariffs on EU Cars

U.S. President Donald Trump announced on May 1 that starting next week, tariffs on cars and trucks imported from the European Union will be raised to 25%, citing the EU's "failure to abide by trade agreements fully agreed upon by both sides."

On Friday, Trump posted on a social media platform stating: "I am pleased to announce that, due to the EU not abiding by our fully agreed-upon trade agreement, next week I will increase tariffs on cars and trucks entering the United States. The tariff will rise to 25%." He later reiterated this stance at the White House, telling reporters: "We have a trade agreement with the EU, but they haven’t followed it, so I’ve raised tariffs on cars and trucks." However, Trump did not specify details of how the EU allegedly violated the agreement, nor did he clearly identify the legal authority under which the new measures would be implemented.

This move targeting the automotive industry is seen by observers as one of the key tools in the Trump administration’s efforts to pressure Europe. The automotive sector is a vital pillar of the European economy, especially in major economies like Germany and France. Analysts suggest that by focusing on the auto industry, the U.S. aims to force Europe to make greater concessions during trade negotiations.

Last July, the U.S. and EU reached a trade agreement at Trump’s golf course in Scotland, under which most European goods would face a 15% tariff—significantly lower than Trump’s earlier threat of 30%. This was viewed as a “breathing room” for the EU. In exchange, Europe agreed to increase investments in the U.S. and adjust certain policies to boost American exports. However, progress on the agreement has been sluggish, particularly over steel and aluminum tariffs, where disagreements continue to widen.

In January, the European Parliament temporarily suspended approval of the agreement, partly due to Trump’s comments suggesting he wanted to annex Greenland, sparking concerns among Europeans about sovereignty and security. Subsequently, the Parliament added additional conditions to the agreement, explicitly stating that if the U.S. "undermines the agreement’s objectives, discriminates against EU economies, threatens the territorial integrity of member states, or engages in economic coercion," the agreement could be suspended. Despite ongoing disputes, the agreement ultimately passed in March.

In response to Trump’s accusation of EU non-compliance, European officials quickly pushed back. Bernd Lange, Chair of the European Parliament’s Committee on International Trade, stated that the U.S. itself has repeatedly violated the agreement—particularly through continued high tariffs on steel and aluminum products. He pointed out that the U.S. expanded its 50% metal tariffs to hundreds of products, causing tangible harm to European businesses. Meanwhile, the European Parliament is still advancing related legislative procedures, with final approval expected by June.

When announcing the new tariffs, Trump also sent a clear signal to European automakers, urging them to shift production to the United States. He said: "It’s completely understandable and already agreed—if they produce cars and trucks in U.S. factories, there will be no tariffs." He further emphasized that billions of dollars in investment have already flowed into the U.S. automotive and truck manufacturing sectors, calling it a "historic record," and claimed that "what’s happening in the U.S. has never been seen before."

Yet this move will significantly impact European automakers. Brands such as Mercedes-Benz, BMW, and Volkswagen have long relied on European plants to supply the U.S. market, now facing direct cost increases. Additionally, brands under Stellantis—including Alfa Romeo, Fiat, and Maserati—are primarily exported from Europe to the U.S., and are expected to be severely affected. Market reactions showed Stellantis’ stock dropping more than 3% on the day of the announcement.

In fact, the global automotive industry has already borne heavy burdens from tariff policies in recent years. According to industry data, U.S. tariffs since 2025 have increased vehicle manufacturers’ cumulative costs by at least $35.4 billion. Multiple automakers—including Toyota, General Motors, and Ford—have reported that related expenses have already reached or are expected to exceed $100 million.

Trump’s previous round of broad-based tariffs introduced on "Liberation Day" were implemented under the International Emergency Economic Powers Act (IEEPA), but have been ruled illegal by the U.S. Supreme Court. Affected companies are now seeking refunds for taxes already paid. However, the current car-specific tariffs fall under a different legal framework and are not affected by that ruling, thus remaining enforceable.

Before this latest escalation, signs of easing in U.S.-EU trade relations had emerged. Both sides had nearly reached consensus on the calculation method for metal tariffs, and the U.S. had made some concessions, indicating potential progress in negotiations. However, with Trump’s sudden announcement to raise car tariffs, market participants widely believe the negotiation process may now stall again. Whether the EU will take retaliatory actions and whether both sides can return to the negotiating table will become key indicators for monitoring the global trade landscape.

Source: rfi

Original article: toutiao.com/article/1864025214982276/

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