Trump hikes tariff on EU cars to 25%, claims trade deal non-compliance
May 1 (UPI) -- President Donald Trump said Friday he plans to increase the tariff on vehicles imported from Europe to 25% because the European Union is not complying with a trade deal.
After the U.S. Supreme Court in February invalidated the Trump administrations tariffs issued under International Emergency Economic Powers Act of 1977, Trump announced a 10% across-the-board tariff and then later upped it to 15%.
In response, the EU delayed a vote to ratify its trade deal with the United States it had negotiated after Trump took office because it considered the universal tariff -- which Trump said would be on top of tariffs that remained in place -- to be a breach of the deal.
Mercedes, BMW and Volkswagon would likely be the most impacted by the additional tariff because of the number of cars they import for sale in the United States, Business Insider and CNBC reported.
Trump's goal is to force the companies to manufacture their vehicles in U.S. plants, which he said Friday would mean tariffs would not apply them.
"Based on the fact that the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States," Trump said in a post on Truth Social.
"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. "Many Automobile and Truck Plants are currently under construction, with over 100 Billion Dollars being invested ... These Plants, staffed with American Workers, will be opening soon."
The EU delayed ratifying the trade deal because it was negotiated based on tariffs Trump had levied using the IEEPA. and his announcement of the across-the-board tariff -- which would be on top of the tariffs agreed to in the deal -- called the whole thing into question.
"A key instrument used on the U.S. side to negotiate and implement the Turnberry Deal is no longer available," the EU said in an official statement at the time.
"The situation is now more uncertain than ever," it said. "This runs counter to the stability and predictability we sought to achieve with the Turnberry Deal."
The European Commission issued a similar statement at the time calling on the United States to honor the deal "with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed."
A White House official on Friday told CNBC that the EU has "failed to make substantial progress on their agreed-upon commitments" under the trade deal, and added that it has "always been clear that the president reserves the right to adjust tariff rates."
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This story was originally published May 1, 2026 at 3:01 PM.