President Donald Trump said he would increase EU tariffs on cars and trucks to 25%, without specifying what authority he would use to increase the levies.
“Since the European Union is not living up to the fully agreed trade deal, next week I will increase the rates charged to the European Union for cars and trucks entering the United States,” he wrote on Social truth Friday. “The tariff will be increased to 25%. It is fully understood and agreed that if they produce cars and trucks in American factories, there will be NO TARIFF.”
THE Supreme Court ruled in February that a large part of Trump’s tariff agenda was illegal. The president’s “reciprocal” tariffs were invoked using a new reading of the International Emergency Economic Powers Act, or IEEPA, but the high court ruled by a 6-3 majority that the law underlying these import duties “does not authorize the president to impose tariffs.”
Shortly after the Supreme Court’s decision, Trump said he had signed an executive order imposing a new “global tariff” rate of 10 percent to effectively replace the IEEPA tariffs, although those tariffs came with a 150-day deadline under Section 122 of the Trade Act of 1974. He later said he would increase the rate. overall rate at 15%.
The EU warned in February that its trade agreement with the United States could be threatened after the announcement of the new tariff rate and the postponement of the planned vote on the agreement.
The Trump administration last year as a whole implemented tariffs of 25% on vehicles and certain auto parts imported into the United States, citing national security risks under Section 232. These levies are still in effect.
European automakers that could be most affected by a tariff rate change would be Mercedes, BMW and Volkswagenwhich imports a significant percentage of the vehicles they sell in the United States from their factories in Europe.