Trump plans 25% tariff on EU autos, citing deal breach

President Donald Trump announced plans Friday to raise tariffs on European Union cars and trucks to 25 percent as early as next week, claiming Brussels has failed to honor the terms of a 2024 bilateral trade agreement, the Korea Times reported.

The proposed hike would more than double the current 10 percent rate and effectively shred the 2024 Turnberry Agreement, which capped EU auto tariffs at 15 percent. Escalating transatlantic trade friction carries potential ripple effects for global auto supply chains — including Korean automakers that compete directly in the U.S. market and whose brands are widely purchased across Orange County.

Trump made the announcement through a social media post, stating the EU "is not complying with our fully agreed to Trade Deal," the Korea Times reported. The administration said it is conducting ongoing investigations into trade imbalances and national security risks, with plans to build a new tariff framework based on those findings.

The Turnberry Agreement, signed in July 2024 by Trump and European Commission President Ursula von der Leyen, established a 15 percent ceiling on EU auto tariffs. That ceiling subsequently fell to 10 percent after the U.S. Supreme Court issued a ruling limiting the president's authority to invoke economic emergency declarations. Both Washington and Brussels had reaffirmed their commitment to preserving the pact in 2025.

The European Commission rejected Trump's position. "A deal is a deal," the commission said in February, following the Supreme Court ruling. "As the United States' largest trading partner, the EU expects the U.S. to honor its commitments set out in the Joint Statement — just as the EU stands by its commitments. EU products must continue to benefit from the most competitive treatment, with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed."

EU automakers had expected the Turnberry Agreement to save them between 500 and 600 million euros — roughly $585 million to $700 million — each month. According to Eurostat, the EU statistics agency, total trade in goods and services between the two blocs reached 1.7 trillion euros in 2024, equivalent to roughly 4.6 billion euros per day.

The standoff tests the durability of the Turnberry Agreement barely two years after it was reached, with Brussels insisting the deal remains legally binding and that any tariff increase above the agreed ceiling constitutes a clear breach of its terms.