On May 1, 2026, Donald Trump posted on Truth Social that he would raise tariffs on European Union cars and trucks to 25 percent. His reason: the EU was not complying with their trade deal. Brussels said this was false. Neither side blinked. The question now is what comes next — and whether anything agreed between these two partners actually holds.
How the Deal Was Made
The story starts in the summer of 2025, at the president’s own golf resort in Turnberry, Scotland.
On July 27, 2025, Trump and European Commission President Ursula von der Leyen reached a political agreement on tariffs and trade. The deal was asymmetrical from the start. On the US side, it contained commitments not to raise tariffs above a ceiling of 15%. On the EU side, it contained commitments to further lower tariffs on goods — particularly industrial goods — and to purchase vast quantities of US military equipment and energy supplies.
The deal was widely perceived as involving significant EU concessions. French Prime Minister François Bayrou called it an act of submission. German Chancellor Friedrich Merz said it would cause considerable damage to his country’s finances. The European Commission defended it as the price of stability — and, reportedly, as linked to continued US backing for Ukraine.
Despite the grumbling, the EU moved forward. In March 2026, the European Parliament approved its negotiating position on two legislative proposals implementing the tariff aspects of the agreement, with 417 votes in favour, 154 against, and 71 abstentions. Trilogue negotiations with the Council began in April.
What Trump Claims, and What Brussels Says
On May 1, Trump announced he was raising tariffs on EU cars and trucks to 25%, claiming the bloc had failed to fully comply with the trade agreement. He offered no specifics.
A European Commission spokesperson rejected this entirely, saying the EU had been implementing its commitments “in line with standard legislative practice” and had been keeping the US “fully informed throughout.” Bernd Lange, the lead MEP negotiating the deal’s implementation, accused the US of “clear unreliability” and of repeatedly breaking commitments. The Commission said it would “keep its options open to protect EU interests” if the US took measures inconsistent with the existing agreement.
The legal scaffolding matters here. Earlier this year, the US Supreme Court ruled that Trump lacked the authority to declare an economic emergency to justify broad global tariffs, which had the effect of reducing the baseline rate on EU goods to 10%. The administration is now invoking Section 232 — the national security provision — to push the auto rate back up to 25%. US Trade Representative Jamieson Greer confirmed Monday the White House is “moving forward with this action.”
The Industry in the Crosshairs
The automotive sector was always the most politically loaded piece of this dispute.
Car trade makes up 8% of all EU-US trade, and the US is the number one destination for EU-built cars, accounting for 29% of total EU auto export value. The new tariffs fall hardest on the high end: Porsche and Audi — both owned by Volkswagen — manufacture no vehicles in the US. Ferrari and Lamborghini produce entirely in Italy.
Germany absorbs the largest share of the damage. VW, BMW, and Mercedes-Benz all have US manufacturing operations, but significant portions of their lineups — Golf hatchbacks in Wolfsburg, S-Class sedans in Stuttgart — are still built in Europe and exported. Trump’s exemption for cars assembled in the US offers theoretical relief, but in practice it is a demand to relocate entire supply chains under threat of punitive taxation.
The EU had calculated that the Turnberry deal would save European automakers between €500 and €600 million per month. That arithmetic has now collapsed.
Europe’s Constrained Hand
EU finance ministers said Europe would consider all retaliatory options, but would prefer to preserve the existing deal if possible. That hedge reflects a real bind.
Europe has so far refrained from strong retaliation against Trump’s tariffs largely because of security concerns — meaning NATO, Ukraine, and the uncomfortable fact that the continent still depends on American military guarantees. Trade and defence have been bundled together throughout this entire saga, and the EU cannot treat them as separate ledgers.
The tools exist. The EU has counter-tariff authority, an anti-coercion instrument sometimes called the “bazooka,” and recourse to WTO dispute mechanisms. Georgetown law professor Gregory Shaffer argues there will eventually be a tipping point, at which point Europe would target US exports from key swing states to maximize political pressure on the administration. That moment has not arrived. Whether the 25% auto tariff triggers it remains to be seen.
A Deal That Was Never Really Binding
Perhaps the most important context gets the least attention: the Turnberry agreement was not a legally binding free trade agreement. It was a political deal — a joint statement — that still had to be converted into domestic legislation on both sides.
The EU’s assumption that heavy concessions would buy stability risked becoming a trap from the start: it handed the US the upper hand in trade without guaranteeing that tariffs would not be further used as geopolitical leverage. That analysis, published days before the May 1 announcement, now reads like a warning that arrived too late to matter.
A Harris Poll in March found that 72% of Americans said tariffs had negatively affected their lives, and a Pew Research survey in April found that 63% of Americans lack confidence in Trump’s handling of tariff policy. The domestic pressure exists. Whether it translates into policy restraint is a different question.
What’s clear is that the Turnberry framework — sold as a new era of transatlantic stability — lasted less than ten months before the larger party decided the terms needed revision. For Europe, for Germany, and for every government trying to negotiate durable arrangements with Washington, that is the most important data point of the week.
Sources：
- Al Jazeera — Trump announces 25 percent tariffs on European Union cars, trucks — https://www.aljazeera.com/news/2026/5/1/trump-announces-25-percent-tariffs-on-european-union-cars-trucks
- CNBC — Trump says he’s raising EU auto tariffs to 25% — https://www.cnbc.com/2026/05/01/trump-eu-auto-tariffs.html
- Bloomberg — EU Prepares Response to Possible US Car Tariffs — https://www.bloomberg.com/news/articles/2026-05-04/eu-vows-action-if-trump-adopts-car-tariffs-but-urges-restraint
- Euronews — Trump to raise US tariffs on EU cars to 25% — https://www.euronews.com/my-europe/2026/05/01/trump-says-will-raise-us-tariffs-on-eu-cars-to-25-accusing-bloc-of-not-complying-with-deal
- European Parliament — EU-US trade legislation: MEPs to resume work on Turnberry proposals — https://www.europarl.europa.eu/news/en/press-room/20260204IPR33305/eu-us-trade-legislation-meps-to-resume-work-on-turnberry-proposals
- European Parliament — EU-US tariffs: tensions, trade deal and what could change — https://www.europarl.europa.eu/topics/en/article/20250210STO26801/eu-us-tariffs-tensions-trade-deal-and-what-could-change
- Verfassungsblog — Avoiding the Turnberry Trap — https://verfassungsblog.de/avoiding-the-turnberry-trap/
- EUalive — EU Parliament passes the Turnberry Agreement — https://eualive.net/eu-parliament-passes-the-turnberry-agreement-yes-to-reduced-tariffs-on-u-s-goods-but-only-with-strong-guarantees/
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