US President Donald Trump announced on Friday that, starting next week, tariffs on cars and trucks imported from the European Union (EU) will be raised to 25%.
Trump stated that this decision was taken because the European Union is failing to adhere to a previously agreed-upon trade pact.
He also added that if European companies were to manufacture cars and trucks within the United States itself, no taxes would be imposed on them.
According to Trump, several new automobile and truck factories are currently being built across the US, attracting investments totaling over $100 billion.
He claimed that such levels of investment and development had never before been witnessed in the United States. These factories, he noted, would provide employment opportunities for the American people.
An Agreement Between Trump and the EU Was Reached Last Year
The trade agreement to which Trump is referring was concluded last July between himself and European Commission President Ursula von der Leyen. This pact is known as the ‘Turnberry Agreement,’ named after Trump’s golf course in Scotland.
The objective of this agreement was to de-escalate the growing trade tensions between the US and the EU. Under this deal, both parties agreed to work toward balancing mutual trade and resolving tariff-related disputes.
The US Had Imposed a 15% Tariff on Goods from the EU
In accordance with the agreement, a 15% tariff was established for most goods imported into the US from the EU. This was considered a significant development, as the Trump administration had previously warned that it might impose tariffs as high as 30%.
In exchange, the European Union pledged to increase investment in the US and to modify certain economic policies in a manner that would boost American exports.
Although the deal was initially viewed as a source of relief, disagreements subsequently emerged regarding several issues. Disputes between the US and Europe intensified over tariffs on steel and aluminum, with nations such as Germany and France voicing their opposition to the American proposals. Furthermore, this year, the US Supreme Court ruled that the President does not have the authority to impose tariffs on EU goods by declaring an economic emergency. Subsequently, the tariff rate was reduced to 10% in certain cases.
