US president says the EU is “out of compliance” with current trade agreements, imposing new tariffs starting next week.
Published May 1, 2026
US President Donald Trump has announced that he will raise tariffs on cars from the European Union to 25%.
Friday’s announcement could send a shockwave through a global economy already fragile due to the U.S.-Israel war with Iran.
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This comes months after the U.S. and EU struck a trade deal, with President Trump imposing broad reciprocal tariffs on trading partners around the world. The deal set tariffs on most items at 15%, lower than the 30% Trump had previously threatened.
In a post on Truth Social, President Trump accused the EU of “not honoring a fully agreed upon trade agreement,” without giving details.
Trump added that he “fully understands and agrees that there will be no tariffs on cars and trucks produced in U.S. factories.”
A spokesperson for the European Commission, the EU’s executive body, denied that the EU was in any way out of compliance.
“We remain fully committed to a predictable and mutually beneficial transatlantic relationship,” the spokesperson said, adding that the European Commission “remains open to options to protect the EU’s interests” if President Trump does not respect existing agreements.
Meanwhile, Hildegard Müller, president of Germany’s VDA Automobile Association, called on the US and EU to respect existing trade agreements and quickly resolve the issue.
Mueller said the cost of additional tariffs would be significant and would likely impact U.S. consumers.
The U.S.-EU agreement, known as the Turnberry Agreement after Trump’s golf course in Scotland, had already been called into question after the U.S. Supreme Court ruled that Trump did not have the power to declare a national emergency to justify many of the tariffs.
This ruling lowered the EU’s tariff ceiling to 10%.
Still, both sides appeared committed to a deal before Trump’s announcement.
The EU had predicted that the bilateral agreement would save European automakers around 500 million to 600 million euros ($587 million to $704 million) per month.
President Trump said the new tariffs would go into effect next week.
The US president launched an aggressive tariff campaign last year, framing the move as a hard reset to boost domestic industry.
Experts say progress toward that goal has been mostly slow, but critics say tariff fees are covered by U.S. companies and the costs are passed on to consumers.
Following a court order, the Trump administration was expected to soon begin issuing the first of an estimated $166 billion in tariff refunds to companies that paid the tariffs directly.
