Trump Raises EU Auto Tariffs to 25% Over Trade Dispute

President Donald Trump announced on May 1, 2026, that the United States would increase tariffs on cars and trucks imported from the European Union to 25%, rising from a previously agreed 15% cap. Trump justified the hike by alleging the EU failed to comply with the Turnberry Agreement, a trade framework established in July 2025. He stated the move is intended to force European manufacturers to shift factory production to the United States, noting that vehicles produced in U.S. plants remain exempt.

The European Commission and European Parliament rejected these claims, asserting that the EU is implementing its commitments according to standard legislative practice and that final ratification is expected in June. EU officials accused the U.S. of breaching the pact through continued steel and aluminum tariffs. In response, French President Emmanuel Macron and other officials advocated for the use of the EU's anti-coercion instrument, described as a "bazooka," to protect strategic interests.

Economic analysts warned of severe impacts, with reports predicting long-term German output losses of up to 30 billion euros. The dispute occurred alongside other geopolitical tensions, including Trump's criticism of Iranian leadership and a threat to withdraw 5,000 U.S. troops from Germany after Chancellor Friedrich Merz suggested the U.S. was being humiliated in its conflict with Iran.

In a separate trade move on the same day, Trump lifted tariffs and restrictions on Scotch whisky imports from the United Kingdom following a state visit by King Charles III and Queen Camilla.