US President Donald Trump announced on May 1, 2026, via Truth Social, 25% tariffs on cars and trucks imported from the European Union effective next week, claiming the bloc breached last summer's trade deal. The EU insists it is complying, demands clarifications, and reserves all options for retaliation, as Germany's auto sector braces for heavy impact.
US President Donald Trump posted on Truth Social on Friday, May 1, 2026: “I am pleased to announce that, given that the European Union is not complying with our trade agreement, next week I will increase the tariffs charged on cars and trucks entering the United States. The tariff will increase to 25%.” The tariffs target vehicles imported from the EU but exempt those produced by EU manufacturers in US factories, where Trump noted “numerous” facilities are under construction with over $100 billion in commitments.
Trump accused Brussels of breaching the bilateral framework agreement—known as the Scotland deal, reached in August 2025, which capped tariffs at a maximum of 15% on most exports alongside EU commitments to purchase US energy. Signed last July by European Commission President Ursula von der Leyen on a non-reciprocal basis also covering Japan and South Korea, the deal has faced hurdles including a US Supreme Court ruling, disputes with German Chancellor Friedrich Merz over the Iran war and European military contributions in the Strait of Hormuz, and pending European Parliament-Council negotiations after a March 2026 position adoption.
A European Commission spokesman stated that "the EU is complying with the commitments of the Joint Declaration" and maintains "close contact with our counterparts" for clarifications, emphasizing commitment to a "predictable and mutually beneficial transatlantic relationship." However, they warned that "if the United States adopts incompatible measures," the EU reserves "all options to protect EU interests," potentially via its anti-coercion instrument. Bernd Lange, chairman of the European Parliament's International Trade Committee (INTA), called the move "unacceptable," stating Trump is not "trustworthy" and that "EP is still honouring the Scotland deal." He likened it to prior "arbitrary attacks" like the Greenland case and urged a response "with maximum clarity and firmness." Iratxe García of the Socialists and Democrats echoed calls for retaliation.
Germany's auto industry, which exported around 450,000 vehicles to the US before prior hikes (VDA data), faces the heaviest blow, representing much of EU car exports there. Shares of Ferrari, Ford, and General Motors fell on US markets. The announcement coincides with the EU-Mercosur deal and a recent EU-US critical minerals pact. Since returning to power, Trump has used tariffs as a key tool, including on steel and autos.
