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US increases tariffs on European vehicles
President Donald Trump announced Friday that the United States will raise tariffs on cars and trucks imported from the European Union to 25%, escalating trade tensions with Brussels. The move targets a sector critical to Europe's economy.
Trump's accusations and EU response
In a post on Truth Social, Trump accused the EU of failing to comply with a bilateral trade agreement but did not specify how. He stated, "I am pleased to announce that... next week I will be increasing Tariffs charged to the European Union for Cars and Trucks."
The European Commission countered that the EU is adhering to its commitments and called the U.S. move inconsistent with their joint statement. A spokesperson 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."
Background of the trade dispute
The tariff hike follows months of strained negotiations. Last year, the EU and U.S. struck a deal at Trump's Turnberry golf course in Scotland, reducing most tariffs to 15%-a relief from the 30% Trump had previously threatened under his "Liberation Day" tariffs. In exchange, Europe agreed to invest in the U.S. and boost American exports.
However, tensions flared over Trump's proposal to annex Greenland, a Danish territory, leading the European Parliament to suspend approval of the deal in January. The agreement was later ratified in March, but only after a clause was added allowing the EU to suspend it if the U.S. undermined its objectives or engaged in economic coercion.
Disputes over steel and aluminum tariffs further stalled talks, with major EU economies like Germany and France rejecting U.S. proposals to adjust levies on a broader range of goods.
European lawmakers condemn move
Bernd Lange, chair of the European Parliament's international trade committee, called Trump's announcement a sign of the U.S.'s unreliability as a trading partner. "President Trump's behavior is unacceptable," the German MEP told the BBC. He dismissed Trump's claim that the EU was not fulfilling its obligations, noting that the European Parliament is finalizing the necessary legislation for June.
Lange cited the U.S.'s "repeated breaches" of the agreement, including average tariffs of 26% on steel and aluminum products. "This latest move demonstrates just how unreliable the U.S. side is," he said, adding that the EU would respond with "utmost clarity and firmness."
Legal and economic implications
Trump's "Liberation Day" tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), were ruled illegal by the U.S. Supreme Court, prompting refunds for affected firms. However, the new car tariffs fall under a different legal process and remain unaffected by the ruling.
In his Truth Social post, Trump urged European automakers to shift production to the U.S., promising no tariffs on vehicles manufactured domestically. He claimed record investments in American car and truck plants, calling it "a record in the history of car and truck manufacturing."
Trade expert Simon Evenett of IMD Business School told the BBC that Brussels would seek legal clarity before retaliating. "Those who reckon that this Administration can't stick to any deal will feel vindicated," he said. "Mind you, social media posts aren't law, so Brussels will want to see the fine print before deciding to hit back."
