US President Donald Trump announced on Thursday that he will impose a 25 percent tariff on cars and trucks imported from the European Union, effective next week. The president accused the EU of failing to comply with the current trade agreement, escalating tensions between the two economic powers.
"The European Union is not complying with the deal we have, and this is unfair to American workers," Trump said during a press briefing at the White House. He argued that the tariffs are necessary to protect the domestic auto industry and reduce the trade deficit.
The announcement targets a key sector of EU exports to the United States. In 2024, the EU exported roughly €40 billion worth of vehicles to the US market. German automakers such as Volkswagen, BMW, and Daimler, as well as French and Italian manufacturers, are expected to be heavily impacted.
European Commission President Ursula von der Leyen responded swiftly, stating that the EU is prepared to retaliate. "We will defend our industry and workers. Tariffs are a tax on ordinary people, and we consider any such measures unjustified," she said in a Brussels statement. EU officials are reportedly drawing up a list of American goods that could face counter-tariffs, including bourbon, motorcycles, and agricultural products.
Auto industry analysts warn that the tariffs could disrupt global supply chains and raise prices for American consumers. "This is a significant escalation in trade policy. US consumers will likely see higher prices on European vehicles and may face retaliation on US exports," said Dr. Linda Chen, a trade economist at Georgetown University.
The move marks the latest chapter in the Trump administration's aggressive trade policy, which has already led to tariffs on Chinese goods and renegotiated trade deals with Canada and Mexico. The US auto sector, however, remains divided: while some domestic manufacturers welcome the protection, others fear supply chain disruptions.