Trump threatens new EU auto taxes that could drive up prices
President Donald Trump threatened to raise tariffs on European Union cars and trucks to 25%, accusing the EU of violating a trade agreement. Research suggests that American consumers would bear most of the cost of any new tariff.
President Donald Trump announced plans to raise tariffs on European Union cars and trucks to 25% on Friday. He accused the EU of not complying with a trade agreement, known as the Turnberry Deal, which was negotiated in July 2025. The deal set a 15% tariff on EU goods and required the EU to buy $750 billion in U.S. energy and invest $600 billion in the United States. The EU froze the agreement in February after the U.S. Supreme Court ruled that Trump exceeded his authority. The EU's car exports to the U.S. fell 21.4% in value in 2025 to about $36.3 billion due to existing U.S. tariffs. The European Automobile Manufacturers' Association warned that the threatened escalation would be damaging for Europe's automotive manufacturers and the broader EU economy.
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