Trump Hits EU Car Imports With 25% Duty Next Week, Citing Broken Trade Deal

Washington: US President Donald Trump on Friday declared that Washington would more than double tariffs on cars and trucks imported from the European Union (EU), raising the levy to 25% from next week. Trump asserted that his decision was a direct response to Brussels’ failure to honour a “fully agreed to” trade deal, and is intended to accelerate investment in American manufacturing.

In a post on Truth Social, the President framed the decision as a victory for US workers. He stressed that any vehicle produced within American plants would be exempt from the new tariff, arguing that the policy would reward companies shifting production to the United States. Trump's announcement has stirred a sharp escalation in the long-running trade tensions between Washington and the 27-member union. 

Notably, the tariff hike comes at a delicate moment for global supply chains and the automotive sector, which has been grappling with shifting trade policies and rising production costs. The European manufacturers, many of whom export large volumes to the US market, now face the prospect of sharply reduced competitiveness unless they expand their US footprint.

‘Not Complying’: Trump Points To Alleged EU Breach

In his statement, Trump stated, “I am pleased to announce that, based on the fact that the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States,” he wrote, adding that the Tariff will be increased to 25%.

Donald Trump did not detail which aspects of the deal the EU had allegedly violated. However, he sought to draw a clear line between imports and domestically built vehicles. “It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF,” he added, underlining the administration’s push to onshore production.

He went on to tout a surge in domestic investment, claiming that “many Automobile and Truck Plants are currently under construction, with over 100 Billion Dollars being invested, A RECORD in the History of Car and Truck Manufacturing.” According to Trump, these facilities would soon open and be staffed by American workers. “There has never been anything like what is happening in America today!” he asserted. 

In his Truth Social post, Donald Trump wrote, "I am pleased to announce that, based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States. The Tariff will be increased to 25%. It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF. Many Automobile and Truck Plants are currently under construction, with over 100 Billion Dollars being invested, A RECORD in the History of Car and Truck Manufacturing. These Plants, staffed with American Workers, will be opening soon — There has never been anything like what is happening in America today! Thank you for your attention to this matter."

Trump’s US Manufacturing Push

The analysts suggested that the tariff announcement fits into Trump’s economic agenda of prioritising domestic industry and reducing reliance on foreign supply chains. By exempting vehicles built in US plants, the White House is effectively creating a two-tier system that favours local production while penalising imports from the EU.

The industry observers noted that several European automakers, including BMW, Mercedes-Benz, and Volkswagen, already operate major plants in America. The impact for them may be mixed, as models imported from Europe would face the 25% duty, while US-built units would escape it. Further, the levy for smaller brands without American factories could price them out of the US market.

The EU has not issued any formal response to Trump’s announcement, but trade officials in Brussels have previously warned that unilateral tariff hikes risk triggering retaliatory measures. The EU remains one of the largest exporters of passenger cars to the US, and any counter-move could hit American agricultural and industrial exports.

Industry Braces for Fallout

The prospect of a 25% tariff has already unsettled parts of the auto sector, with the European carmakers witnessing their shares dip in early trading following the announcement, while US-based manufacturers with extensive domestic production were steadier. The analysts asserted that the real test will come next week when the tariffs take effect and supply chains begin adjusting.

The analysts further suggested that the policy for American consumers could mean higher prices on European models, from compact hatchbacks to luxury SUVs. The dealers are likely to reassess inventories, and buyers may turn towards US-built alternatives to avoid the added cost. Meanwhile, Trump’s emphasis on the $100 billion in new plant investments suggests the administration is betting that the short-term trade friction will yield long-term manufacturing gains.