US President Donald Trump has announced plans to raise tariffs on cars and trucks imported from the European Union (EU) to 25 per cent, signalling a sharp escalation in trade tensions between Washington and Brussels.
Tariff hike announcement
Trump said the increase would take effect next week, accusing the EU of failing to meet commitments under a previously agreed trade deal, per BBC. In a post, he stated, "I am pleased to announce that… next week I will be increasing Tariffs charged to the European Union for Cars and Trucks."
He also 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." However, he did not specify how the EU had breached the agreement.
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EU seeks clarity, keeps options open
The European Commission responded by stating it was adhering to its obligations while seeking further clarification from the US. "We will keep our options open to protect EU interests," the Commission said, per BBC.
It added that it remains committed to "a predictable, mutually beneficial transatlantic relationship" and warned that it could respond if the US takes steps inconsistent with the joint agreement.
Strain on a recent trade deal
The move comes less than a year after the EU and US reached a trade agreement that set tariffs on most European goods at 15%, following earlier threats of higher levies.
Since then, tensions have resurfaced over issues including US proposals related to Greenland and disagreements on tariffs for steel and aluminium. The European Parliament had temporarily paused approval of the deal before eventually clearing it with added safeguards.
Pressure on European auto sector
By targeting automobiles, Trump has focused on a sector central to several European economies. Germany and France, in particular, have previously opposed changes to tariff structures affecting exports.
Trump also encouraged European manufacturers to shift production to the United States. "It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF," he said.
Mixed reactions and uncertainty
European officials and trade experts have raised concerns about the development. Bernd Lange, chair of the European Parliament's international trade committee, called the move a sign of unpredictability, saying, "President Trump's behaviour is unacceptable."
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Meanwhile, trade analyst Simon Evenett noted, "Those who reckon that this [US] Administration can't stick to any deal will feel vindicated."
While the announcement adds to existing uncertainty, further details on implementation are awaited, with both sides closely watching the next steps.
