President Donald Trump announced on Friday his intention to raise U.S. tariffs on automobiles imported from the European Union from 15% to 25%, citing noncompliance with a trade agreement signed last year. The increase would mark a reversal from last year’s reduction, which had lowered the tariff from 25% to 15% as part of the pact signed in Scotland between the United States and the 27-nation bloc.

Trump made the announcement on his Truth Social platform, stating that “based on the fact the European Union is not complying with our fully agreed to Trade Deal,” the U.S. would increase tariffs on EU cars and trucks to 25%. The administration has not yet specified the exact date the higher tariffs would take effect or the specific conditions EU officials must meet to avoid the hike.

The original agreement last year reduced the tariff from 25%—a rate imposed previously by the Trump administration on national security grounds—to 15%, putting the EU on par with other major auto exporters such as Japan and South Korea. European lawmakers are still in the process of ratifying the treaty, which has not yet been codified into law.

The tariffs at issue are imposed under Section 232 of the Trade Expansion Act of 1962, which allows the president to levy duties based on national security considerations. A recent Supreme Court decision invalidated some of Trump’s other emergency tariffs but did not affect the automotive levies, preserving presidential authority to adjust them unilaterally.

European cars account for a relatively small share of the U.S. auto market—fewer than 700,000 out of more than 16 million vehicles sold annually—but the U.S. remains an important destination for European manufacturers. According to the European Automobile Manufacturers’ Association, the United States is the second-largest market for EU automotive exports, representing about 20% of total exports. German automakers such as Volkswagen have a particularly strong presence.

EU auto exports to the U.S. declined 21% in 2025, according to the trade group, a drop largely attributed to the existing tariffs. Trump pointed out on Friday that vehicles manufactured within the U.S. are exempt from these tariffs, a factor that has led some European companies to consider expanding or establishing production facilities stateside. However, such undertakings involve significant investment and must meet volume requirements to be economically viable.

This latest move follows a pattern of the Trump administration using tariff threats as leverage in trade negotiations, as seen previously with South Korea, where initial proposals to impose 25% reciprocal automotive tariffs were ultimately settled at 15% after extended talks. Throughout his tenure, Trump has frequently threatened increased duties on various European goods, including automobiles, wine, and alcohol, often prompting negotiations that have averted tariff escalations.