WASHINGTON: President Donald Trump said Friday that he will increase the tariffs charged on cars and trucks from the European Union next week to 25%, a move that could jolt the world economy at a fragile moment.
The pact, which was struck last summer, had capped the US tariff on EU autos and parts at 15 percent, which is lower than the 25-percent duty that Trump imposed on many other trading partners.
But the US leader said Friday: "Based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States."
"The Tariff will be increased to 25%," he wrote on his Truth Social platform.
Trump and European Commission President Ursula von der Leyen had agreed to the trade deal last July.
Both the U.S. and the EU had previously confirmed their commitment to preserving the trade framework, known as the Turnberry Agreement, which was named after Trump’s golf course in Scotland.
But the status of the 2025 deal was first cast into doubt after the Supreme Court this year ruled that the Republican president lacked the legal authority to declare an economic emergency and charge tariffs on EU goods.
The initial agreement had been a tariff ceiling of 15% on goods from the EU, but the Supreme Court ruling reduced that to 10% as the Trump administration launched a new set of import taxes based on other laws.
The Trump administration is in the middle of investigations on trade imbalances and national security risks to impose a new tariff regime, which could ultimately put the agreement with the EU in risk of violation.
The EU had said it expected the bilateral deal would save European automakers about 500 million to 600 million euros ($585 million to $700 million) a month.
The value of EU-U.S. trade in goods and services amounted to 1.7 trillion euros ($2 trillion) in 2024, or an average of 4.6 billion euros a day, according to EU statistics agency Eurostat.
“A deal is a deal,” the European Commission said in February after the Supreme Court ruling.
“As the United States’ largest trading partner, the EU expects the U.S. to honor its commitments set out in the Joint Statement — just as the EU stands by its commitments. EU products must continue to benefit from the most competitive treatment, with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed.”
