President Donald Trump said Friday he will hike tariffs on cars and trucks from the European Union to 25% starting next week, a move that could rattle global markets as trade tensions flare.
In a post announcing the decision, Trump said the EU “is not complying with our fully agreed to Trade Deal,” but did not provide specifics about the alleged violations.
The administration’s latest escalation puts fresh strain on a deal Trump reached last July with Ursula von der Leyen. That agreement set a 15% tariff cap on most goods traded between the two economic powers under what became known as the Turnberry Agreement, named after Trump’s golf resort in Scotland.
Both sides had publicly reaffirmed their commitment to the framework in the months following the deal. But its stability was thrown into question earlier this year after the Supreme Court of the United States ruled that Trump lacked the authority to invoke an economic emergency to impose sweeping tariffs on EU imports.
That ruling forced a recalibration of the agreement. While the original ceiling stood at 15%, the court’s decision effectively lowered it to 10% as the administration pivoted to alternative legal authorities to pursue new import taxes.
Officials have since launched multiple investigations into trade imbalances and potential national security concerns tied to foreign imports, laying the groundwork for a broader tariff regime that could further strain the pact with Europe.
The stakes are high. Trade in goods and services between the U.S. and the EU reached roughly 1.7 trillion euros, or about $2 trillion, in 2024, according to Eurostat. That works out to an average of 4.6 billion euros in daily transatlantic commerce.
European officials have already warned Washington against backing away from the agreement. “A deal is a deal,” the European Commission said in February after the Supreme Court ruling. “As the United States’ largest trading partner, the EU expects the U.S. to honor its commitments set out in the Joint Statement — just as the EU stands by its commitments. EU products must continue to benefit from the most competitive treatment, with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed.”
