Trump Hikes EU Auto Tariffs to 25%; U.S.-EU Trade Tensions Rise

President announces 25% tariffs on European cars and trucks, saying Europe has not complied with the 2025 trade deal designed to prevent a broader tariff war.\n\nThe move reopens a chapter in US-EU trade tensions and could ripple across auto supply chains already strained by inflation, energy shocks and geopolitical tensions.\n\nOfficials say the duties will apply to passenger cars and light trucks, with the exact mechanics still under review, following a Supreme Court decision that struck down reciprocal tariffs earlier this year and warning Europe that its response would matter.\n\nUK exports to the U.S. plunged about 25% in the wake of tariff announcements, underscoring the immediate fallout for exporters on both sides of the Atlantic while the 2025 deal sought to stabilize supply chains.\n\nAnalysts warn a renewed tariff spat could raise prices for American consumers and complicate manufacturing plans, prompting automakers to rethink sourcing and routing of parts as discussions continue.\n\nIn a broader context, US-Europe trade policy remains a flashpoint as administrations weigh responses to global tensions, inflation, and energy shocks, with weeks ahead likely to reveal Europe’s reply and the viability of a negotiated path.

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