President Trump said Friday he would raise tariffs on cars and trucks imported from the European Union to 25 percent next week, accusing Brussels of failing to honor the trade deal the two sides struck last summer.
The announcement marks a sharp escalation in a relationship that had appeared to be moving toward stability after months of friction over metals duties, the Greenland dispute, and what U.S. officials see as a lack of support in the war with Iran.
“The European Union is not complying with our fully agreed to Trade Deal,” Trump said in a post on Truth Social
The Turnberry Agreement, named for the president’s Scottish golf resort where the pact was announced in July 2025, set a 15 percent ceiling on most U.S. tariffs on EU goods. In exchange, the EU committed to eliminating duties on American industrial products and opening its markets to a range of U.S. agricultural exports. The deal was widely described as lopsided in Washington’s favor, but European leaders accepted the terms to head off a threatened 30 percent tariff and to preserve broader diplomatic ties at a moment when the continent needed American engagement on Ukraine.
The agreement has faced a difficult path to implementation. The European Parliament twice paused ratification proceedings, first after Trump threatened to acquire Greenland, and again after the Supreme Court struck down the administration’s tariff powers under the International Emergency Economic Powers Act in February. EU lawmakers finally approved the deal’s enabling legislation on March 26, attaching a “sunrise clause” conditioning EU tariff cuts on continued U.S. compliance and a sunset provision that would terminate the pact in March 2028. The legislation still requires agreement with EU member states, and trilogue negotiations are underway.
A persistent source of tension has been metals. Last August, the U.S. expanded its 50 percent tariff on steel and aluminum to hundreds of additional products containing those metals, a move the EU contended violated the spirit of the Turnberry commitments. Companies struggled to calculate the levies, which were assessed based on the metal content of each product. Washington recently adjusted the methodology, but on Wednesday, Germany and France told fellow EU governments in a closed-door meeting that the revised approach actually worsened the tariff burden on roughly half the affected products, Bloomberg reported.
Trump said the higher auto levies would not apply to vehicles assembled in the U.S. “It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF,” he said.
That distinction creates uneven exposure among European automakers. Volkswagen, Mercedes-Benz and BMW all operate assembly plants in the United States and would be partially insulated from the increase. Stellantis, which imports its Alfa Romeo, Fiat and Maserati lines from Europe, faces a more direct hit. The company’s U.S.-listed shares fell as much as 3.6% Friday afternoon, though the stock was already under pressure after quarterly results released earlier in the day disappointed investors.
The move comes at a fragile moment for the global economy. The Iran conflict, now in its third month, has pushed energy prices sharply higher and injected fresh uncertainty into trade and investment decisions on both sides of the Atlantic. EU-U.S. trade in goods and services totaled roughly 1.7 trillion euros, or about $2 trillion, in 2024, according to Eurostat.
The European Commission had estimated that the Turnberry deal’s 15 percent auto tariff would save European carmakers between 500 million and 600 million euros a month compared with the duties that preceded it. A jump to 25 percent would erase those savings and could prompt retaliatory measures from Brussels, which has repeatedly signaled it has countermeasures ready.
“A deal is a deal,” the Commission said in February after the Supreme Court ruling upended the tariff landscape. “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.”
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