EU and U.S. trade chiefs meet to defuse Trump's threatened 25% auto tariffs

Cars are back at the center of the U.S.-EU trade fight. That matters because autos are one of the most politically sensitive and economically exposed parts of the transatlantic relationship. The gap is pretty simple — Washington says Brussels has not delivered the market-opening steps it promised last year, while Brussels says the deal still has to move through normal EU lawmaking. What changed now is that EU governments are scrambling to lock in their side of the bargain before Donald Trump follows through on a threat to raise tariffs on European cars and trucks to 25%. (money.usnews.com) ### What deal are they fighting over? The dispute goes back to the trade framework Trump and Ursula von der Leyen struck in July 2025, then formalized in an August joint statement. The broad idea was a truce: the EU would move to eliminate tariffs on U.S. ind(money.usnews.com)% ceiling mattered a lot because it replaced a much harsher stack of duties. (policy.trade.ec.europa.eu) ### Why are cars the pressure point? Because the auto piece is both huge and easy to weaponize. European carmakers, especially German ones, rely heavily on access to the U.S. market. Trump’s new threat is blunt: if EU-made c(policy.trade.ec.europa.eu)ation threat — not just a tax dispute. (cnbc.com) ### Why hasn’t the EU just done its part? Because “the EU” is not one switch. The Commission can negotiate, but changing tariff law still has to pass through the European Parliament and member states. Reuters says talks between Parliament and the Council resume on Wednesday, May 6, on legislation to lower EU duties on imported U.S. g(cnbc.com)mp tariff threats rattled the process. So from Washington’s view, Brussels is dragging its feet. From Brussels’ view, this is just how EU law works. (money.usnews.com) ### Why is Germany so exposed? Because Germany is the EU’s car powerhouse, and a 25% U.S. tariff would land hardest there. Chancellor Friedrich Merz has already pushed for a quick conclusion, basically saying the Americans have finished their side and Europe (money.usnews.com)se for export-heavy economies. (money.usnews.com) ### Is this just about trade, or also about leverage? It is clearly leverage. Trump is using a threatened tariff jump to force faster EU action. The catch is that this can backfire. Bernd Lange, who chairs the European Parliament’s trade committee, has argued(money.usnews.com)push Europe to dig in rather than fold. (money.usnews.com) ### Why does the legal angle matter? Because Trump’s original “reciprocal” tariff system was knocked down by the Supreme Court in February, so his team has been leaning on narrower authorities instead. CNBC says the White House pointed to Section 232 for the (money.usnews.com)tration’s effort to rebuild tariff pressure using legal routes the court has not closed off. (cnbc.com) ### What happens next? The immediate test is whether EU lawmakers and member states can move fast enough to show implementation is real before the U.S. acts. If they do, the 15% ceiling might survive. If they do not, autos could become the trigger for a wider breakdown in the 2025 trade truce. That would not just hit carmakers — it w(cnbc.com)isional when politics shifts. (money.usnews.com) ### Bottom line This is a fight about cars, but really it is a fight about whether the U.S. and EU can keep a tariff ceasefire alive once the paperwork gets messy. Right now, Brussels is racing the clock. Washington is using the clock as a weapon. (money.usnews.com)