U.S. threatens 25% auto tariffs

Cars are back at the center of the U.S.-EU trade fight. The new move is simple enough — Washington is threatening a 25% tariff on European cars and trucks unless the EU finishes ratifying a trade deal that was supposed to calm things down. But the bigger story is that this is also about leverage. Trump’s team lost its broadest tariff weapon in court earlier this year, so now it’s leaning harder on narrower tools that still work. ### What changed this week? On May 6, U.S. ambassador to the EU Andrew Puzder said the U.S. would likely move “relatively soon” on 25% tariffs for EU cars and trucks unless Europe shows “substantial progress” on ratifying the agreement. That was not some stray comment. It came days after Trump said on May 1 that he would raise the tariff rate on EU autos to 25% because the bloc was not living up to the trade deal. ### What deal is this about? The awkward part is that there already is a framework deal. Back on March 26, after a European Parliament vote, Puzder publicly welcomed implementation of the EU’s tariff commitments under the U.S.-EU Framework Agreement on Trade and called for a swift conclusion of the remaining talks. So the problem is moving too slowly for Washington. ### Why are cars the pressure point? Because cars hurt fast. A 25% tariff is big enough to hit pricing, margins, and sourcing decisions right away, especially for premium European brands that ship finished vehicles into the U.S. It is also politically useful. Auto tariffs are visible, easy to message, and tied to Trump’s standing claim that foreign carmakers should build too. ### Why now, specifically? Turns out the legal backdrop matters a lot. Trump’s earlier “reciprocal” tariffs ran into a Supreme Court ruling in February that said the emergency-powers law behind them did not authorize tariffs. Since then, the White House has been using other authorities instead. CNBC says the EU auto increase would be made under Section 232 — the national-security route, so the administration is trying another one. ### Is this just a threat, or a near-term policy? Closer to near-term than bluff. Trump already said the higher rate would start the following week from his May 1 announcement, and Puzder’s May 6 comments were framed as a warning that the administration is still prepared to go ahead unless Europe moves. Bloomberg’s wording was blunt — “relatively soon.” That suggests the White House sees it as a talking point. ### What is Europe doing? Europe looks less defiant than cautious. EU officials have said they remain committed to the transatlantic relationship, but they have also warned they will keep options open if Washington takes measures that break the joint understanding. In practice, that means Brussels is trying to finish its side of the deal without looking like it is ratifying under threat. That is a hard balance. ### Why