The trade deal between the US and the EU, which was agreed just last summer, is already showing cracks. President Trump signals a return to the tariff playbook and proposes imposing a 25% duty on European cars and trucks. But this time the trigger is geopolitical as much as economic.<\/p>\n
Donald Trump\u2019s tariff menace has been out of the picture for some time, but it hasn\u2019t vanished. Last Friday, he ratcheted up trade barriers against Europe again, announcing on his Truth Social platform that he intends to raise import duties on cars and trucks from the European Union to 25 percent. In other words, the original tariff menace from when he took office.<\/p>\n
But that didn\u2019t happen. Under a trade framework concluded in Scotland in July last year, the European automotive industry reached a degree of stability. That deal capped American tariffs on most EU goods, including vehicles, at 15 percent (which was regarded as \u2018sour but manageable\u2019). The American president now accuses European partners of failing to honor the agreement, without providing details on what specific obligations had been breached.<\/p>\n
The Scotland agreement was a hard-fought compromise. In exchange for the lower American tariff rate, the EU committed to largely eliminating its own import duties on American products. The deal passed a significant hurdle when the European Parliament backed it last March, but not without controversy: members attached multiple safeguards and conditional clauses, reflecting deep skepticism about Washington’s reliability as a trading partner. Questioning that reliability doesn\u2019t seem far-fetched now.<\/p>\n
In fact, EU member states have not yet formally ratified the final text. It was paused twice, once due to the Greenland threat. The legal status of the arrangement remains technically incomplete on both sides. With concrete implementation steps still pending, it seems the president’s patience has worn out.<\/p>\n
But there\u2019s more behind the move than bureaucracy. Apparently, the menace follows a public spat between Trump and German Chancellor Friedrich Merz, who said publicly that the United States “apparently has no strategy” in Iran.<\/p>\n
Trump responded by musing about reducing the American military presence in Germany, and the tariff threat against European automakers appears to be at least partly an extension of that diplomatic friction.<\/p>\n
Specifically, Trump has been pressing European allies to contribute militarily or logistically to US operations in the Strait of Hormuz, amid the ongoing conflict with Iran. Several EU member states have refused. It seems the president is now backtracking on economic sanctions.<\/p>\n
For the German automotive sector, the news comes as a sharp blow on top of multiple worries, including slow EV adoption and strong Chinese competition. Germany remains the EU’s largest car exporter to the American market, shipping around 450,000 vehicles across the Atlantic annually.<\/p>\n
Hildegard M\u00fcller, president of the German automotive industry federation VDA, called on both sides to step back from escalation and open negotiations without delay, warning that the costs of an additional tariff hike would be “enormous” for an industry already operating under severe pressure.<\/p>\n
The concern is far from theoretical. Volkswagen disclosed that existing US tariffs already represent an annual cost burden of around 4 billion euros, while its US sales contracted by around a fifth in the first quarter compared to a year earlier. Mercedes-Benz has previously estimated the tariff impact on its 2025 profitability at approximately one billion euros.<\/p>\n
The tariffs have not been without consequences. All three major German groups, BMW, Mercedes-Benz, and Volkswagen, have announced significant local investment commitments.<\/p>\n
Volkswagen is building a second American plant under its Scout Motors subsidiary, tailored specifically to the US market. Mercedes-Benz said in March it would invest $4 billion in its Alabama factory, partly to shift GLC production from Germany to Alabama. Despite this, all three still export their higher-margin models from Europe, and those vehicles would be largely exposed.<\/p>\n
Among European manufacturers, Stellantis, which imports Alfa Romeo, Fiat, and Maserati models from European factories into the US market, would also be highly affected.<\/p>\n
One detail that caught immediate attention: British carmakers escape Trump\u2019s wrath. Jaguar, Aston Martin, and Land Rover are not mentioned. The same day, Trump separately lifted tariffs on Scotch whisky, framing the gesture as a tribute to King Charles III and Queen Camilla, who had just concluded a state visit to Washington. A royal intervention?<\/p>\n
Contrary to what you might expect, Trump\u2019s threat isn\u2019t applauded on the US side either. The tariff threat risks undermining the market access gains that American exporters were counting on from the Scotland deal.<\/p>\n
Detroit’s biggest manufacturers are also feeling squeezed: rising oil prices linked to the Iran conflict and higher raw material costs have already added around five billion dollars in combined extra expenses, according to the Financial Times. Tariff escalation with Europe adds another layer of complexity to an already pressured quarter.<\/p>\n
The EU Commission, for its part, stated that implementation of the July agreement is proceeding through the normal legislative process and that Washington is being kept informed throughout.<\/p>\n","protected":false},"excerpt":{"rendered":"
The trade deal between the US and the EU, which was agreed just last summer, is already showing cracks. President Trump signals a return to the tariff playbook and proposes imposing a 25% duty on European cars and trucks. But this time the trigger is geopolitical as much as economic. Donald Trump\u2019s tariff menace has […]<\/p>\n","protected":false},"author":715,"featured_media":185697,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[28,31030,16,25,77169,4,77165],"tags":[],"class_list":["post-185696","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-europe","category-export","category-industry","category-legislation","category-market","category-top-stories-today","category-usa"],"acf":[],"featured_image_urls_v2":{"full":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?fit=1964%2C1292&ssl=1",1964,1292,false],"thumbnail":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=150%2C150&ssl=1",150,150,true],"medium":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?fit=300%2C197&ssl=1",300,197,true],"medium_large":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?fit=640%2C421&ssl=1",640,421,true],"large":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?fit=640%2C421&ssl=1",640,421,true],"1536x1536":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?fit=1536%2C1010&ssl=1",1536,1010,true],"2048x2048":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?fit=1964%2C1292&ssl=1",1964,1292,true],"trp-custom-language-flag":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?fit=18%2C12&ssl=1",18,12,true],"related-thumb":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=640%2C480&ssl=1",640,480,true],"gform-image-choice-sm":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=300%2C300&ssl=1",300,300,true],"gform-image-choice-md":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=400%2C400&ssl=1",400,400,true],"gform-image-choice-lg":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=600%2C600&ssl=1",600,600,true],"mailchimp":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?fit=560%2C368&ssl=1",560,368,true],"unipress-phone":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=640%2C100&ssl=1",640,100,true],"unipress-tablet":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=1536%2C240&ssl=1",1536,240,true],"unipress-tablet-portrait":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=1536%2C180&ssl=1",1536,180,true],"unipress-tablet-landscape":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=1964%2C180&ssl=1",1964,180,true],"unipress-smartphone":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=1080%2C168&ssl=1",1080,168,true],"unipress-wide-screen":["https:\/\/i0.wp.com\/newmobility.news\/wp-content\/uploads\/2026\/05\/Scherm%C2%ADafbeelding-2026-05-04-om-09.30.31.png?resize=1964%2C180&ssl=1",1964,180,true]},"post_excerpt_stackable_v2":"
The trade deal between the US and the EU, which was agreed just last summer, is already showing cracks. President Trump signals a return to the tariff playbook and proposes imposing a 25% duty on European cars and trucks. But this time the trigger is geopolitical as much as economic. Donald Trump\u2019s tariff menace has been out of the picture for some time, but it hasn\u2019t vanished. Last Friday, he ratcheted up trade barriers against Europe again, announcing on his Truth Social platform that he intends to raise import duties on cars and trucks from the European Union to 25…<\/p>\n","category_list_v2":"Europe<\/a>, Export<\/a>, Industry<\/a>, Legislation<\/a>, Market<\/a>, Top Stories Today<\/a>, USA<\/a>","author_info_v2":{"name":"Piet Andries","url":"https:\/\/newmobility.news\/en\/author\/piet-andriesgmail-com\/"},"comments_num_v2":"0 comments","yoast_head":"\n