Trump Announces 25% Tariffs on European Union Cars and Trucks

May 2, 2026

President Donald Trump announced Friday he will increase tariffs on European Union cars and trucks to 25% next week, claiming the EU is not complying with the July 2025 Turnberry Agreement that had capped auto tariffs at 15%. The move comes as Trump faces political pressure with only 30% approval on economic handling and 3.3% inflation in March 2026, higher than when he took office. Trade expert Scott Lincicome says the EU was basically complying with the framework, while the European Parliament was expected to finish work on the deal next month. The tariff increase threatens EU-US trade worth 1.7 trillion euros in 2024 and would particularly harm Germany, which accounts for a significant share of EU auto exports to America.

Trump's Tariff Increase Announcement and Trade Deal Dispute

▪President Donald Trump announced on Friday that he will increase tariffs on cars and trucks from the European Union to 25% next week
▪Donald Trump and European Commission President Ursula von der Leyen agreed to a trade deal in July 2025
▪The July 2025 trade deal between the US and EU set a 15% tariff on most goods

Economic and Political Context: Iran War and Inflation Pressures

▪Donald Trump returned to the White House in 2025 on the explicit promise that he could quickly tame prices that jumped in the aftermath of the government's response to the coronavirus pandemic
▪Just 30% of US adults approved of Donald Trump's handling of the economy according to the latest poll by The Associated Press-NORC Center for Public Affairs Research
▪The March 2026 inflation rate of 3.3% was higher than what Donald Trump had inherited
▪Annual inflation in the United States reached 3.3% in March 2026

Legal Framework and Implementation Mechanisms

▪Donald Trump would likely use Section 232 of the Trade Expansion Act of 1962 to raise tariff rates, which allows for duties on national security grounds
▪Donald Trump imposed 25% Section 232 tariffs on foreign autos in March 2025
▪The Supreme Court ruling reduced the tariff ceiling on EU goods from 15% to 10%
▪The 25% Section 232 tariffs on foreign autos were lowered as part of the trade framework with the EU
▪The Supreme Court ruled in 2026 that Donald Trump lacked the legal authority to declare an economic emergency and charge tariffs on EU goods
▪The Trump administration launched a new set of import taxes based on other laws after the Supreme Court ruling

EU-US Trade Relations and Economic Impact

▪EU-US trade in goods and services averaged 4.6 billion euros per day in 2024 according to Eurostat
▪The European Commission stated in February 2026 that EU products must continue to benefit from the most competitive treatment with no increases in tariffs beyond the previously agreed ceiling
▪Donald Trump threatened earlier in 2026 to take control of Greenland
▪The value of EU-US trade in goods and services amounted to 1.7 trillion euros in 2024