WASHINGTON — President Donald Trump said on Friday that he will increase the tariffs charged on cars and trucks from the European Union next week to 25%, a move that could jolt the world economy at a fragile moment.
Trump said in a social media post that the EU “is not complying with our fully agreed to Trade Deal,” though he did not flesh out his objections in the post.
Asked by reporters on Friday about the increase in import taxes as he departed the White House for Florida, Trump said the EU was not “as usual” adhering to last year's trade framework, without detailing the source of the tension. He added that he believed the shift to higher tariffs “forces them to move their factory production much faster” to the U.S.
Trump and European Commission President Ursula von der Leyen had agreed to the trade deal last July. It set a tariff ceiling of 15% on most goods, though the Supreme Court this year ruled against the legal authority that Trump had used to charge that tax. This left Trump looking for substitute authorities, and his administration has imposed a 10% tax while investigating trade imbalances and national security issues to put in new tariffs to make up for lost revenues.
Tariffs could hit a global economy already hurt by the Iran war
The tariffs hit at a moment when the Iran war has crushed the world economy with expectations of slower growth and higher inflation, as oil and natural gas prices have risen due to the effective closure of the critical Strait of Hormuz after strikes by the U.S. and Israel began at the end of February.
At the same time, Trump faces political pressure in the U.S. going into November's midterm elections because of rising levels of inflation. Trump, a Republican, returned to the White House last year on the explicit promise that he could quickly tame prices that jumped in the aftermath of the government's response to the coronavirus pandemic, but higher energy costs pushed annual inflation in March to 3.3%, which was higher than what he had inherited.
Just 30% of U.S. adults approved of Trump's handling of the economy, according to the latest poll by The Associated Press-NORC Center for Public Affairs Research.
Europe wants last year's trade deal to hold
The European Parliament has been moving slowly on finalizing last year's trade agreement but was expected to finish work on the deal next month. The EU said in a statement that it was implementing its “commitments in line with standard legislative practice” and should the U.S. “take measures inconsistent with" that agreement "we will keep our options open to protect EU interests.”
Trump administration officials have not responded to questions about the tariff increase and why Trump said the agreement had been violated. But Trump has had a testy relationship with Europe, having threatened earlier this year to take control of Greenland and later blasting NATO allies for not providing more support to the U.S. for the Iran war.
Bernd Lange, chair of the European Parliament trade committee, posted on social media that Trump's tariff hike on autos was “unacceptable” and that the Trump administration “keeps breaking its commitments,” including on import taxes for steel and aluminum products.
Jennifer Safavian, CEO of Autos Drive America, which represents the American operations of foreign auto manufacturers, said the tariff increase “would threaten the progress that has already been made to open EU markets and grow the U.S. auto industry.”
Both the U.S. and the EU had previously confirmed their commitment to preserving the trade framework, known as the Turnberry Agreement, which was named after Trump’s golf course in Scotland.
Trump's tariff plans were already upended by the Supreme Court
The status of the 2025 deal was first cast into doubt after the Supreme Court this year ruled that the president lacked the legal authority to declare an economic emergency and charge tariffs on goods from the members of the EU and other states.
The Trump administration has opened up trade investigations under Section 301 of the Trade Act of 1974 to replace the tariffs struck down by the court. One of the investigations is looking into whether those trading partners have been lax in cracking down on forced labor. And the other is pursuing allegations that they’ve overproduced goods, driving down prices and putting American manufacturers at a disadvantage.
The alternative tariffs being explored by the Trump administration could ultimately put the agreement with the EU in risk of violation, though European Commissioner for Trade and Economic Security Maroš Šefčovič told reporters last week that the relationship with the U.S. had become more positive over the past year.
To raise tariff rates, Scott Lincicome of the libertarian Cato Institute’s Center for Trade Policy Studies said, the president would likely use Section 232 of the Trade Expansion Act of 1962, which allows for duties on national security grounds.
Trump imposed 25% Section 232 tariffs on foreign autos in March 2025, but those tariffs were then lowered as part of the trade framework with the EU.
Lincicome also said Trump’s threats are “just another example of why these trade deals are vaporware. They all rely on handshakes and winks and hopes that Trump doesn’t get mad about something.’’
The EU had said it expected the bilateral deal would save European automakers about 500 million to 600 million euros ($585 million to $700 million) a month.
The value of EU-U.S. trade in goods and services amounted to 1.7 trillion euros ($2 trillion) in 2024, or an average of 4.6 billion euros a day, according to EU statistics agency Eurostat.
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AP writers Paul Wiseman in Washington and Alexa St. John in Detroit contributed to this report.