The move would hit one of Europe’s largest export flows to the US, with ACEA estimating that EU vehicle exports to the American market were worth €31 billion in 2025.
The latest dispute centres on the Turnberry Agreement, the EU-US trade framework agreed in July 2025 by Trump and European Commission President Ursula von der Leyen. Under the arrangement, the US agreed to apply a 15% all-inclusive tariff rate to most EU goods, including vehicles and vehicle parts. The EU, in return, committed to removing tariffs on US industrial goods and opening tariff-rate quotas for some US agricultural products.
However, on 1 May, Trump said he intended to raise tariffs on EU cars and trucks from 15% to 25%, accusing the bloc of failing to comply with the deal. According to Euronews, the US president said the increase would take effect the following week and argued that vehicles made in the US by European manufacturers would remain exempt.
The European Commission rejected the accusation. In comments reported by Euronews and the Associated Press, a Commission spokesperson said the EU was implementing its commitments “in line with standard legislative practice”.
EU trade chief Maroš Šefčovič met US Trade Representative Jamieson Greer in Paris on 5 May. Reuters reports that one of the EU’s main concerns was Trump’s threat to raise US tariffs on EU cars and trucks to 25%. Brussels urged Washington to restore the agreed Turnberry terms before the deal’s first anniversary in July.
EU legislation still not complete
The dispute comes as the EU has not yet completed the legislative process needed to remove duties on US industrial products. Reuters reports that Šefčovič briefed Greer on the likely timeline, with EU implementation now expected in June. The Commission has said it would be beneficial for the main parts of the agreement to be in place before the end of July, when the deal reaches its first anniversary.
That unfinished EU process has given Washington a political opening. The Commission insists that implementation is moving through the normal legislative route, while the US administration is using the delay to threaten higher tariffs on one of Europe’s most valuable export sectors.
ACEA warns against renewed tariff pressure
The European vehicle industry has urged EU institutions to conclude the trade-deal trilogues quickly. ACEA says around 670,000 new vehicles were exported from the EU to the US in 2025, worth €31 billion. The US was Europe’s second-largest export market for new vehicles after the UK, accounting for 18.4% of EU vehicle exports.
The association’s latest fact sheet shows that EU vehicle exports to the US fell by 21.7% in value in 2025. EU car exports to the US totalled 667,794 units, worth €30.9 billion, while EU commercial vehicle and bus exports to the US fell sharply from 8,484 to 5,108 units.
Although the headline figures are dominated by passenger cars, the dispute also affects Europe’s truck and bus manufacturers. ACEA represents major commercial vehicle producers including DAF Trucks, Daimler Truck, Iveco Group, MAN, Scania, Volvo Group and Volkswagen Truck & Bus.
Daimler Truck already hit by tariffs in North America
The pressure is already visible in truck manufacturers’ results. Daimler Truck reported on Wednesday that its first-quarter operating profit had more than halved, falling to €498 million from €1.08 billion a year earlier. Reuters reports that the fall was driven by weak demand and the full impact of US import tariffs in North America.
The group’s North American vehicle sales fell by 25% to 29,432 units. Reuters said the division took a €624 million hit from lower sales, tariffs and currency effects, while adjusted return on sales dropped from 14.4% to 5.4%.
Daimler Truck kept its full-year outlook, supported by stronger incoming orders, but the quarterly figures show how tariff uncertainty is already feeding into commercial vehicle earnings.
German carmakers face billions in tariff costs
The broader automotive industry is also warning of a rising cost burden. Volkswagen CEO Oliver Blume said tariffs were costing the group around €5 billion a year in operating profit. Reuters notes that Blume did not specify whether the estimate referred to current tariff levels or the proposed increase from 15% to 25%.
Germany’s VDA automotive association has urged both sides to honour the existing trade agreement and avoid escalation. Reuters reported that VDA president Hildegard Müller warned that additional tariffs would create “enormous” costs and would likely also hit US consumers.
French President Emmanuel Macron also criticised the escalation, saying the US and EU were wasting time on tariff threats. AP reported that Macron urged stability, while Commission President Ursula von der Leyen said trade agreements must be respected and that the EU was ready for all outcomes.
