US plans to hike tariffs on EU cars to 25% will hit luxury market the most

by | May 5, 2026 | World

The United States is set to impose 25 percent tariffs on the European Union’s auto sector, a move that would reverse an agreement reached in August between Washington and the bloc.US Trade Representative Jamieson Greer told CNBC on Monday that the White House is “moving forward with this action”.Recommended Stories list of 4 itemsend of listEarlier this year, the US Supreme Court ruled that President Donald Trump could not impose his global tariffs through the International Emergency Economic Powers Act (IEEPA), limiting the president’s sweeping global tariffs.However, last year, Trump imposed a 25 percent tariff on global automotive imports under Section 232, citing national security risks. In August, the White House reached a deal with the EU to lower those levies to 15 percent.“He does have authority to do this. What’s less clear is what the US issue is. Europe had needed EU-level implementation of the agreement, which delayed some implementation,” Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, told Al Jazeera.Why is Trump targeting Europe?Trump claimed that the bloc had not complied with the deal — an assertion EU officials rejected. Trump accused the countries of violating the agreement after a slate of European countries declined to send their militaries to help the US Navy open the Strait of Hormuz.“This threat is a negotiating tactic, of course. However, the US leverage is somewhat less after the IEEPA tariff …

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