The United States will implement 25% US car tariffs on European Union automobiles starting next week. President Donald Trump announced the move on May 1, 2025, stating that the EU had failed to comply with the terms of a trade agreement with the U.S. He urged European automakers to immediately move production to American soil to avoid the tax impact.
The implementation schedule for various tariff categories (2025–2026) is as follows:
- Auto parts: The deadline for introducing tariffs is May 3, 2026.
- Cars and trucks (EU): The 25% increase takes effect during the week of May 4 to May 10, 2026.
- Global import levy (10%): Effective from February 24, 2026. This temporary levy is introduced for 150 days (until July 24, 2026) under Section 122 of the Trade Act of 1974, following a U.S. Supreme Court ruling that declared Trump’s previous tariffs illegal.
US car tariffs: Which car brands are most at risk
German premium brands and luxury car manufacturers, whose business models rely heavily on direct imports from Europe, will be the most affected by the new tariffs:
- Porsche: Considered the most vulnerable brand. The company has no plants in the U.S., and all its vehicles are imported.
- Mercedes-Benz and BMW: Both will be impacted due to models manufactured exclusively in Germany—primarily executive sedans—despite having existing U.S. factories.
- Volkswagen and Audi: Both are in a high-risk zone. Volkswagen’s position is further complicated by tariffs on Mexican-assembled vehicles (such as the Jetta and Tiguan), which Trump is actively restricting.
- Luxury brands: Ferrari, Lamborghini, Bentley, and Aston Martin will face the full tariff amount because they lack U.S. production facilities.
- Stellantis and Volvo: These companies are on the vulnerable list due to their high share of imported components and finished vehicles.
EU Reaction: U.S. unpredictability and calls for firmness
The European Union viewed Washington’s actions as a gross violation of agreements. Bernd Lange, Chairman of the European Parliament’s Committee on International Trade, called Trump’s plan unacceptable. Lange stated that the EU is fulfilling its obligations established in Turnberry, Scotland, and is continuing to prepare relevant legislation, while the U.S. side is violating them. He described the U.S. administration’s steps as “clearly unpredictable” and urged the EU to maintain a tough stance against what he called arbitrary actions.
Sweden’s Position: De-escalation to save exports
Individual EU countries are attempting to smooth over the conflict to avoid economic losses. Sweden’s Minister for International Development Cooperation and Foreign Trade, Benjamin Dous, told SVT that Stockholm will make every effort to de-escalate the situation. He emphasized that both sides must quickly fulfill their parts of the agreement. The Swedish economy is heavily dependent on the automotive sector, including Volvo, and unstable behavior from partners is seen as a worst-case scenario for its companies.
Failed Deal: Greenland and “Economic Coercion”
NEWSROOM IN notes that the baseline trade agreement between the EU and the U.S., signed on July 27, 2025, never entered into force. In early 2026, the European Parliament postponed its ratification several times. One reason was Donald Trump’s attempt to impose 10% tariffs on countries that did not support his plan to “acquire” Greenland. Brussels viewed this as direct “economic coercion” and pressure on sovereignty, leading European lawmakers to demand clear guarantees from Washington that the deal would be respected.
Another factor was a U.S. Supreme Court decision in February that declared Donald Trump’s previous tariffs illegal. The president responded with a new 15% “tariff ultimatum.” Bernd Lange, the lead negotiator for the European Parliament, stated that a vote scheduled for February 23, 2026, was canceled due to legal chaos. The new American levies are being applied on top of existing ones, which effectively nullifies the Scotland agreements reached last summer and leaves the EU in a disadvantaged position.
Mutual Accusations
Washington considers the blocking of ratification a deliberate sabotage of the deal by the European Parliament. Trump argues that the EU is using political pretexts to maintain a favorable status quo and increase the U.S. trade deficit.
Conversely, European officials describe Trump’s statements regarding EU countries as aggressive and are calling for a boycott of American goods. In response, the U.S. president is intensifying rhetoric regarding the EU’s “unfriendliness” and striking at its most sensitive area—the European automotive industry.
What happens next?
The introduction of 25% tariffs would make exporting cars—particularly German brands—from Europe to the U.S. unprofitable. To meet Trump’s demands, automakers would be forced to move production capacity across the Atlantic, leading to capital flight and the loss of tens of thousands of jobs in the EU. Alternatively, the industry may wait for a change in the Trump administration’s stance.
The European Commission is expected to respond with asymmetric tariffs on American electronics and agricultural products. This would move the transatlantic economy into a state of trade war, negatively affecting all parties involved.