Trump says he will hike tariffs on EU cars to 25%

Donald Trump is increasing the tariffs charged on cars and trucks imported from the European Union to 25% in a sharp escalation of trade tensions with Brussels.

The US president accused the EU of "not complying with our fully agreed to trade deal" in a post on Truth Social, but did not explain how.

"I am pleased to announce that… next week I will be increasing Tariffs charged to the European Union for Cars and Trucks," Trump said on Friday.

The European Commission responded: "We will keep our options open to protect EU interests".

The Commission said the EU was adhering to its commitments but was also seeking "clarity" from the US around its commitments.

In targeting the automotive sector Trump has chosen a particularly sensitive target, as car manufacturing makes up a significant proportion of Europe's economy.

The move comes less than a year after the EU and US agreed a deal at Trump's Turnberry golf course in Scotland, which set levies on most European goods at 15%.

That marked a reprieve for the EU from the 30% tariffs Trump had threatened to impose as part of his sweeping "Liberation Day" tariffs. In exchange, Europe agreed to invest in the US and make changes expected to boost US exports.

However in the following months tensions mounted over President Trump's threats to annex Greenland, a self-governing Danish territory. In January the European Parliament in January suspended the approval of the trade deal.

The deal was eventually approved by the European Parliament in March, but only after a clause had been added, allowing it to be suspended if the Trump administration was deemed to have "undermined the objectives of the deal, discriminated against EU economic operators, threatened member states' territorial integrity, foreign and defence policies, or engaged in economic coercion".

Since then talks have again stalled over a dispute about steel and aluminium. Major European economies such as Germany and France had rejected US plans to adjust tariffs on a wide range of goods.

In its statement the European Commission said the EU was implementing the deal "in line with standard legislative practice, keeping the US administration fully informed throughout".

The spokesman said: "We remain fully committed to a predictable, mutually beneficial transatlantic relationship. Should the US take measures inconsistent with the Joint Statement, we will keep our options open to protect EU interests".

Asked on Friday in what way the EU had failed to apply the terms of its deal with the US, Trump did not elaborate.

He told reporters: "We have a trade deal with the European Union. They were not adhering to it. So I raised the tariffs on cars and trucks."

Announcing the tariff hikes, Trump urged European carmakers to shift production to the US.

"It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF," his Truth Social post read.

He said billions of dollars are being invested in car and truck plants across the country, figures he described as "a record in the history of car and truck manufacturing".

"There has never been anything like what is happening in America today," Trump added.

Bernd Lange, the chair of the European Parliament's international trade committee, told the BBC Trump's statement demonstrated "just how unreliable the US" is as a trading partner.

"President Trump's behaviour is unacceptable," the influential German MEP said.

He dismissed the President's argument that the EU was not fulfilling its side of the deal and said the European Parliament was in the process of drafting the necessary legislation which it aimed to finalise in June.

Mr Lange acknowledged his committee had paused implementation of the deal because of US pressure over Greenland and the fallout of the US Supreme Court decision.

But he said the US has "repeatedly breached the agreement" pointing to products containing steel and aluminium which are now subject to average tariffs of 26%.

He said: "This latest move demonstrates just how unreliable the US side is. We have already witnessed these arbitrary attacks from the US in the case of Greenland; this is no way to treat close partners. Now we can only respond with the utmost clarity and firmness, drawing on the strength of our position."

Professor Simon Evenett, a trade expert at the IMD Business School, told the BBC: "Those who reckon that this [US] Administration can't stick to any deal will feel vindicated.

"Mind you, social media posts aren't law, so Brussels will want to see the fine print before deciding to hit back."

Trump's Liberation Day tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), have since been ruled illegal by the Supreme Court, with firms that paid up now seeking refunds after a Supreme Court decision.

But the tariffs affecting cars fall under a different legal process, and are not impacted by the Supreme Court ruling.