Trump to Increase Tariffs on EU Auto Imports

On Friday, President Trump declared plans to raise tariffs on cars and trucks coming from the European Union to 25%, set to take effect next week. He accused Brussels of failing to uphold a trade agreement made last summer.

This decision represents a significant escalation in what had been a trend toward stability, following previous tensions over metal tariffs, disputes over Greenland, and limited support for U.S. officials regarding Iran.

“The European Union is not honoring the trade agreement we fully agreed to,” Trump stated on his platform, Truth Social.

The agreement in question, known as the Turnberry deal, was named after Trump’s Scottish golf resort where it was announced in July 2025. It capped most U.S. tariffs on EU goods at 15% in exchange for the EU eliminating tariffs on American industrial products and opening markets to U.S. agricultural goods. Although the deal was viewed as favoring the U.S., European leaders accepted it to avoid proposed 30% tariffs and to maintain vital diplomatic relationships during a time when American support was critical for Ukraine.

However, implementing this agreement has proven challenging. The European Parliament has delayed ratification twice—once after Trump’s Greenland comments and again after the Supreme Court curtailed the administration’s tariff powers. On March 26, EU lawmakers cleared the final bill needed to enact the agreement, introducing a “sunrise clause” which requires ongoing U.S. compliance for reduced EU tariffs and a sunset clause terminating the deal in March 2028. The bill still needs to gain the agreement of EU member states, with tripartite negotiations currently underway.

Metal tariffs have continually caused friction. In August, the U.S. extended 50% tariffs on steel and aluminum to numerous products, something the EU argued contradicted the Turnberry commitments. Companies struggled with calculating levies based on metal content. Recent adjustments by the U.S. government, however, reportedly led to an even heavier burden on about half of affected products, according to Germany and France during a confidential meeting.

Trump mentioned that the new vehicle tariffs wouldn’t affect cars manufactured in the U.S., saying, “It is well understood and agreed that there will be no tariffs on cars and trucks produced in American factories.”

This creates a mixed situation for various European automakers. Companies like Volkswagen, Mercedes-Benz, and BMW, which have plants in the U.S., will be somewhat shielded from these new tariffs. Conversely, Stellantis, which imports Alfa Romeo, Fiat, and Maserati, faces immediate challenges. Their shares dropped as much as 3.6% on Friday, already pressured by disappointing quarterly results released earlier that day.

The timing of this move is particularly precarious for the global economy. The ongoing conflict in Iran is driving energy prices up, leading to uncertainty in trade and investment decisions across the Atlantic. Eurostat reported that total trade in goods and services between the EU and the U.S. reached around 1.7 trillion euros (about $2 trillion) in 2024.

The European Commission had estimated that the Turnberry agreement’s initial 15% car tariff would save European manufacturers between 500 million and 600 million euros a month compared to earlier tariffs. A hike to 25% could eliminate those savings and provoke retaliatory measures from Brussels, which has indicated readiness for such action.

“A deal is a deal,” the commission stated in February after the Supreme Court decision altered the customs landscape. “EU products must continue to benefit from the most competitive treatment, without tariffs increasing beyond the agreed limits.”