Trump threatens 25% EU auto tariffs

President Donald Trump said on May 1 that he would raise U.S. tariffs on cars and trucks from the European Union to 25% from 15%, reopening a dispute over a trade pact struck with Brussels last year. Trump made the threat in a Truth Social post, saying the bloc was not complying with what he called a “fully agreed” deal. The proposed increase would reverse a central term of the July 27, 2025 Turnberry agreement, which set a 15% ceiling for most EU exports to the United States, including cars and car parts. European officials have said they are still moving legislation through the bloc’s institutions and that the agreement remains in force. ### Which part of the U.S.-EU deal is Trump threatening to undo? The European Commission says the July 2025 agreement with Trump restored “stability and predictability” and capped U.S. tariffs at 15% for most EU exports, including cars, semiconductors, pharmaceuticals and lumber. The commission says the 15% rate was designed as an all-inclusive ceiling with no stacking for those sectors. (politico.com) Trump said on May 1 that cars and trucks would no longer stay at that ceiling. In his post, he said the European Union was not living up to its side of the agreement and that the tariff “will be increased to 25%.” CNBC reported the White House said the administration would use Section 232 as the legal authority for the change. ### What has the European Union said it still owes under Turnberry? (commission.europa.eu) POLITICO reported that the Turnberry deal called on the EU to lower tariffs on U.S. industrial goods and make broader commitments on energy purchases and investment. European Trade Commissioner Maroš Šefčovič said after an April visit to Washington that he had been reassured by U.S. officials that “a deal is a deal for both sides.” (politico.com) The European Parliament’s research service said in March that the EU was still implementing the tariff side of the framework through legislation proposed by the European Commission in August 2025. That process moved through Parliament and the Council with added safeguards and a review clause, rather than taking effect automatically. (politico.com) ### Why is implementation still unfinished on the European side? The European Parliament research note says lawmakers were voting a first-reading position in March 2026 on two regulations needed to implement the EU’s tariff commitments under the framework agreement. Those measures cover the elimination of customs duties on remaining U.S. industrial goods and an extension of lobster tariff concessions. (europarl.europa.eu) Bernd Lange, chair of the Parliament’s trade committee, said on May 1 that lawmakers were “currently drafting the legislation,” had a parliamentary position and aimed to finalize it in June. He also said Washington had already breached the agreement by keeping broad tariffs on products containing steel and aluminum. ### What other tariff disputes are already hanging over the deal? (europarl.europa.eu) The European Parliament’s research service said the United States added about 407 derivative product categories to 50% steel and aluminum tariffs in August 2025 and opened new product-specific Section 232 investigations. It also said the United States imposed a temporary 10% blanket surcharge under Section 122 after a U.S. Supreme Court ruling on February 20, 2026 invalidated the legal basis of earlier reciprocal tariffs. (politico.com) CNBC reported on May 8 that Trump then gave the EU until July 4, 2026 to ratify the trade agreement, warning tariffs would jump to “much higher levels” if the bloc failed to do so. European Commission President Ursula von der Leyen said after speaking with Trump that the bloc remained “fully committed” to implementing the deal and that “good progress” was being made toward tariff reduction by early July. (europarl.europa.eu) ### What does this mean for European carmakers selling into the United States? The threatened change applies to imported EU-built cars and trucks entering the U.S. market, where German luxury brands and other European manufacturers rely on transatlantic shipments for some models and parts. Reuters reported on May 1 that the move drew rebukes from European politicians and trade groups after Trump said the rate would rise the following week. (cnbc.com) The European Commission says the U.S.-EU trade relationship remains the world’s largest bilateral trade and investment relationship, with goods and services worth €1.6 trillion traded in 2024. That scale means any change in the auto tariff rate would land inside a broader commercial relationship already being negotiated across metals, pharmaceuticals and industrial goods. (usnews.com) ### What happens next, and when will there be a clearer answer? July 4, 2026 is the deadline Trump publicly set for the European Union to ratify its trade agreement with Washington. That date now sits alongside the earlier auto tariff threat and the EU’s own legislative timetable. Bernd Lange said Parliament aims to finalize its position in June, while von der Leyen said progress toward tariff reduction was being made by early July. (commission.europa.eu) Those steps by the European Parliament, the European Commission and U.S. officials are the next named milestones in the dispute. (politico.com) (cnbc.com)