Donald Trump said he would increase tariffs on EU cars to 25 per cent, attacking the bloc for not complying with the deal it struck with the US last year and escalating transatlantic trade tensions.
In a Truth Social post on Friday, the president said he would begin to impose the tariffs “next week” on all European cars and trucks entering the US. “It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF,” Trump wrote.
The move risks upending the deal struck between Washington and Brussels last summer, months after Trump had announced his “liberation day” trade war, in a sign to US allies that the president is willing to use duties on countries with which Washington has forged agreements.
Although the Supreme Court earlier this year ruled Trump could not use emergency powers to impose immediate levies on trading partners, the duties on cars are issued under a different legal authority and were not affected by that ruling.
Washington and Brussels struck a limited trade agreement that reduced Trump’s steep “liberation day” levies to 15 per cent on most goods imported to the US from the bloc.
In exchange, the EU agreed to slash its own levies on US industrial goods and some agricultural products to zero.
But US officials have grown frustrated by the slow pace at which the bloc has moved to implement its side of the deal.
EU lawmakers approved the trade deal earlier this year, although it was delayed because of anger over Trump’s campaign to acquire the Danish territory of Greenland.
However, MEPs set conditions including agreeing to reverse the decision if Trump imposed new levies.
Under the terms of the trade deal, European exports of cars, pharmaceuticals and semiconductors to the US were all subject to the 15 per cent tariff.
“We remain fully committed to a predictable, mutually beneficial transatlantic relationship,” the European Commission said.
“Should the US take measures inconsistent with the joint statement, we will keep our options open to protect EU interests.”
It added: “The EU is implementing its joint statement commitments in line with standard legislative practice.”
Sigrid de Vries, director-general of Acea, the European car industry body, declined to comment directly on Trump’s move.
But she said: “A return to 27.5 per cent tariffs and an open-ended trade dispute would be deeply damaging for Europe’s automotive manufacturers, their workers and the broader EU economy.”
Trump in January also threatened to raise tariffs on South Korea to 25 per cent, after he accused Seoul of “not living up to” a trade deal agreed between the two countries last year. But he has not followed through with his threat.
Jennifer Safavian, president of Autos Drive America, which represents foreign carmakers in the US, said Trump’s move would “threaten the progress that has already been made to open EU markets”.
She added: “We urge the administration and the EU to uphold the agreement made last year and work together to find a swift resolution.”
The escalation of trade tensions also comes as Washington seeks to persuade allies, including in Europe, to work with it on securing supply chains of critical minerals and reducing dependency on China.
Additional reporting by Henry Foy in Brussels and Kana Inagaki in London and Christian Davies in New York
