President Donald Trump said on Friday that duties on autos and trucks imported from the European Union will be raised to 25% beginning next week, attributing the decision to the EU's noncompliance with a recently agreed trade framework.
In his announcement, the president specified that the tariff increase applies to vehicles entering the United States from EU member states. He added that cars and trucks assembled at U.S. plants are excluded from the higher duty, and therefore will not face the 25% tariff.
Mr. Trump also pointed to what he described as a record level of capital flowing into American vehicle production, saying that more than $100 billion is currently being invested in U.S. automobile and truck manufacturing plants.
The action follows a trade agreement finalized between the United States and the European Union in August 2025. That deal established a 15% tariff on autos and auto parts, with terms applied retroactively to August 1, 2025. The framework, announced on August 21, 2025, was presented as a means to lower tariffs from prior levels and to resolve outstanding trade disputes.
Separately, the president has criticized NATO's backing of the Iran war and has maintained a strained relationship with German Chancellor Friedrich Merz. According to the account of recent exchanges, on Thursday Mr. Trump told Chancellor Merz to prioritize the Russia-Ukraine conflict and Germany's domestic matters rather than involving himself in the Iran war.
Summary
The administration will raise tariffs on EU-manufactured cars and trucks to 25% next week, excluding vehicles built at U.S. plants. The move is justified by the administration as a response to the EU's failure to comply with the terms of a trade agreement that had set a 15% tariff rate and applied retroactively to August 1, 2025. The president highlighted over $100 billion in current investment in U.S. auto and truck manufacturing.
Key points
- The tariff increase to 25% targets cars and trucks imported from the European Union and will take effect next week.
- Vehicles produced in U.S. plants are exempt from the tariff hike.
- The U.S.-EU trade agreement finalized in August 2025 previously set a 15% tariff on autos and auto parts, with terms applied retroactively to August 1, 2025.
Risks and uncertainties
- Uncertainty over how the tariff escalation will affect EU-U.S. trade relations, particularly in the automotive sector.
- Potential strain on relations with European leaders, including the noted tensions with German Chancellor Friedrich Merz.
- Uncertainty about market reactions in auto and parts supply chains given the contrast between the new 25% tariff and the previously agreed 15% framework.
Note: This article reports the statements and timeline provided by the administration and the details of the August 2025 trade agreement as presented. It does not add or infer information beyond those statements.