Last week, US President Donald Trump announced to hike tariffs on cars and trucks manufactured in the European Union from 15 percent to 25 percent after accusing the bloc of taking too long to comply with the terms of the trade deal agreed last July.Trump’s latest trade barb comes as the transatlantic ties have been strained, with the latest friction point emanating from the EU’s refusal to join Washington’s current war on Iran.Recommended Stories list of 3 itemsend of list“I am pleased to announce that, based on the fact the European Union is not complying with our full 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,” Trump wrote, without providing any evidence for his claim.The US president, however, said that vehicles made in the US by EU companies would be exempted from the levy.So far, no additional tariffs have come into effect, but the move has surprised Brussels, with the European Commission rejecting Trump’s claim that the EU was not complying with last year’s trade deal.So, how significant is Trump’s threat, and how will the EU respond?Here’s what we know:What is the current trade deal between the EU and US?In July 2025, the US and the EU reached a wide-ranging trade agreement, capping US tariffs on most EU goods, including cars, at 15 percent af …
