President Trump said Friday that U.S. tariffs on EU cars and trucks will rise to 25% next week, and the EU's lead trade voice in parliament called the move "unacceptable" within hours.
The fight is now over a deal both sides signed less than a year ago.
Trump posted on Truth Social that the EU "is not complying with our fully agreed to Trade Deal." He gave no further reasons for the hike.
The previous tariff on EU autos was capped at 15% under the trade deal struck last summer. Bumping it to 25% next week would hit Germany hardest, since Germany ships the largest share of EU autos to the U.S.
Trump added one carve-out: vehicles built at U.S. plants by EU automakers would face no tariff at all.
The announcement came one day after Trump renewed criticism of German Chancellor Friedrich Merz, telling him to focus on Ukraine instead of weighing in on Iran.
The catch: The auto fight is happening at the same time the two sides are still trying to write the trade deal into actual law on the EU side.
Bernd Lange is a lead member of the European Parliament currently negotiating how the U.S.-EU trade deal gets put into law. He posted on social media that Trump's announcement showed "clear unreliability" and accused the U.S. of repeatedly breaking its commitments.
His exact line: "Donald Trump's plan to impose 25% duties on cars from the EU is unacceptable."
Lange added that the European Parliament is still working to finalize the legislation that puts the deal in place. The European Commission echoed him, saying "a deal is a deal" and that the U.S. should "honour its commitments."
Trump and European Commission President Ursula von der Leyen agreed to the trade deal last July at Trump's golf course in Scotland. It set a 15% tariff ceiling on most EU goods and was meant to save European carmakers between 500 and 600 million euros a month.
A U.S. Supreme Court ruling earlier this year cut that 15% ceiling down to 10% after finding Trump lacked the legal authority to impose tariffs by declaring an economic emergency.
The Trump administration has been rebuilding a tariff plan under different laws since then, and Friday's announcement is the latest move in that rebuild.
European automakers Volkswagen, BMW, Mercedes-Benz, Stellantis (NYSE: STLA), and Porsche all sell into the U.S. market. A 25% tariff on cars and trucks from the EU bumps the cost of every European-built vehicle that crosses the U.S. border.
EU-U.S. trade in goods and services hit 1.7 trillion euros in 2024, or about 4.6 billion euros a day, according to EU data. Cars are a big slice of that.
EU lawmakers are split on how hard to push back. France and Spain back a tougher stance, while Germany and Italy want to keep the deal in place as written.
The next test is whether members of the European Parliament suspend the deal again, like they did in February. The new tariff rate is set to take effect next week.