• President Donald Trump disclosed that the United States will raise tariffs on EU cars and trucks to 25% next week
• Trump accused the European Union of failing to comply with a previously agreed trade deal
• The European Commission warned it may retaliate if the US imposes measures outside the agreed framework

The United States President, Donald Trump, has announced plans to raise US tariffs on cars and trucks imported from the European Union to 25 percent next week, escalating trade tensions with one of Washington’s biggest economic partners.

Trump made the announcement on Friday, May 1, accusing the EU of failing to honour the terms of a previously agreed trade deal reached last summer.

“Based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States,” Trump wrote on Truth Social.

“The Tariff will be increased to 25%.”

The move marks a sharp increase from the 15 percent tariff ceiling agreed under the 2025 US-EU trade pact, which had lowered duties on European automobiles and auto parts in a bid to ease tensions between both sides.

That agreement had offered the EU some relief, especially as Trump had imposed steeper 25 percent tariffs on several other trade partners.

Trump, however, did not explain how the EU had allegedly failed to meet its obligations under the deal, nor did he provide specific details on what prompted the latest tariff threat.

In response, the European Commission signalled it was prepared to defend the bloc’s economic interests if Washington follows through.

“Should the US take measures inconsistent with the joint statement, we will keep our options open to protect EU interests,” a European Commission spokesperson told AFP.

The spokesperson added that the EU was carrying out its commitments “in line with standard legislative practice” and said Brussels had continued to keep the Trump administration informed throughout the process.

The warning revives the threat of a broader transatlantic trade dispute. Last July, the EU had already drawn up a list of American goods it could target in retaliation should negotiations with Washington collapse.

Although the European Parliament approved the framework of the 2025 trade agreement in late March, lawmakers attached conditions and called for additional safeguards before full implementation.

The deal still requires further negotiation and approval by EU member states before it can take full effect.

Trump’s renewed tariff threat has also stirred concern among businesses already unsettled by the unpredictability of his trade agenda.

The new threat on European cars “explain why many small businesses expect to be cautious” with Trump’s tariffs, said Dan Anthony, who heads “We Pay the Tariffs,” a coalition of nearly 1,200 small businesses.

“You never know what might trigger the next tariff threat,” Anthony added.

The timing of Trump’s announcement is also notable, coming just a day after he criticised German Chancellor Friedrich Merz, telling him to focus on ending the war in Ukraine instead of “interfering” in Iran.

Germany is expected to be among the hardest hit if the tariff hike takes effect, given its dominant role in EU auto exports to the United States. Germany exported roughly 450,000 vehicles to the US in 2024, according to the VDA industry group, though that figure has since declined.

The United States remains the second-largest destination for EU vehicle exports after the United Kingdom, with more than one in five EU vehicle exports heading to the American market, according to the European Automobile Manufacturers’ Association.

Trump slaps 100% tariff on foreign drugs, expands metal duties in bold trade move

Meanwhile, TheRadar earlier reported that the United States president, Donald Trump, has signed two major executive orders targeting foreign-made pharmaceuticals and imported metals.

The administration imposed a 100 percent tariff on patented medicines produced outside the United States. The move is designed to pressure global pharmaceutical companies to shift production to US soil or negotiate favourable trade agreements.