Trump Imposes 25% Tariffs on EU Cars, Escalating Trade War

Asked on Friday in what way the EU had failed to apply the terms of its deal with the US, Trump did not elaborate further than his initial accusations. He told reporters: "We have a trade deal with the European Union. They were not adhering to it. So I raised the tariffs on cars and trucks." In his Truth Social post, he added that it is "fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF". He highlighted that billions of dollars are being invested in car and truck plants across the country, figures he described as "a record in the history of car and truck manufacturing".

Diplomatic Fallout and Parliamentary Response

The escalation has drawn sharp criticism from European leadership. Bernd Lange, the chair of the European Parliament's international trade committee, told the BBC that Trump's statement demonstrated "just how unreliable the US" is as a trading partner. Lange dismissed the President's argument that the EU was not fulfilling its side of the deal, stating that the European Parliament was in the process of drafting necessary legislation which it aimed to finalize in June.

Mr Lange acknowledged that his committee had paused implementation of the deal because of US pressure over Greenland and the fallout of the US Supreme Court decision. However, he argued that the US has "repeatedly breached the agreement," pointing to products containing steel and aluminium which are now subject to average tariffs of 26%. Lange said: "This latest move demonstrates just how unreliable the US side is. We have already witnessed these arbitrary attacks from the US in the case of Greenland; this is no way to treat close partners. Now we can only respond with the utmost clarity and firmness, drawing on the strength of our position."

The current standoff highlights the fragility of the transatlantic trade relationship. While the Trump administration frames the 25% Donald Trump levy as a necessary correction for European non-compliance, European officials view it as an arbitrary attack that violates the spirit and letter of the recent agreement. The inclusion of the suspension clause in the March approval indicates that the EU had anticipated such volatility, yet the immediate return to aggressive tariff hikes suggests that the underlying trust in the partnership has severely deteriorated.

As the US moves to enforce the new levies, the European Commission maintains that it is acting within its rights to seek clarification while preparing potential countermeasures. The focus has shifted from cooperation to defense of economic interests, with the suspension clause potentially being invoked again if the situation regarding steel, aluminium, and now automotive goods continues to worsen. The path forward remains unclear, with both sides entrenched in their positions and no immediate diplomatic mechanism offered to resolve the dispute.

Trade Relations Under Threat

The imposition of these EU tariffs marks a significant deterioration in US-European economic ties, reversing recent diplomatic gains. If the European Union does not find a mechanism to negotiate a new framework that addresses US concerns regarding Greenland and industrial policy without further economic coercion, the region could face prolonged trade disruptions. The precedent set by this abrupt policy shift suggests that future agreements will require even stricter enforcement clauses, potentially isolating the US economy from traditional European markets in the long term.