Trump says he will hike tariffs on EU cars to 25%

Donald Trump is increasing the tariffs charged on cars and trucks from the European Union to 25%.

The US president accused the EU of "not complying with our fully agreed to trade deal" in a post on Truth Social, but did not explain how.

"I am pleased to announce that… next week I will be increasing Tariffs charged to the European Union for Cars and Trucks," Trump said on Friday.

The current level of tariffs charged on goods entering the US from the EU is 15%, under a deal negotiated last July.

Trump's latest announcement marks a sharp escalation in trade tensions between Washington and Brussels.

Talks about how to move forward on last summer's deal had stalled over a dispute on steel and aluminium, with major European economies like Germany and France rejecting U.S. plans to adjust tariffs on a wide range of goods.

Cars are a vital industry for Europe, so it marks a particularly sensitive target for Trump to pick.

It was a reprieve for the EU from the 30% tariffs Trump had threatened to impose as part of his "Liberation Day" wave of tariffs that April.

In exchange, Europe had agreed to invest in the US and make changes on the continent expected to boost US exports.

As tensions mounted over President Trump's threats to annex Greenland, a self-governing Danish territory, the European Parliament in January suspended the approval of the deal.

It later included a clause stating the deal can be suspended if the Trump administration is deemed to have "undermined the objectives of the deal, discriminated against EU economic operators, threatened member states' territorial integrity, foreign and defence policies, or engaged in economic coercion".

It was approved by the European Parliament in March, following the dispute.

Announcing the tariff hikes, Trump urged European carmakers to shift production to the US.

"It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF," his Truth Social post read.

He said billions of dollars are being invested in car and truck plants across the country, figures he described as "a record in the history of car and truck manufacturing".

"There has never been anything like what is happening in America today," Trump added.

Trump's Liberation Day tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), have since been ruled illegal by the Supreme Court, with firms that paid up now seeking refunds after a Supreme Court decision.

But the tariffs affecting cars fall under a different legal process, and are not impacted by the Supreme Court ruling.