Trump Tariff: The tariff dispute between the United States and the European Union is escalating. Meanwhile, the US has decided to levy higher taxes on cars imported from Europe.

The European Union said on Saturday (May 2, 2026) that it would keep all options open to protect its interests if the United States takes steps contrary to the common trade agreement. This reaction came after US President Donald Trump threatened to increase tariffs by 25 percent on cars and trucks imported from the EU.

"We are fully committed to a stable and mutually beneficial trans-Atlantic relationship, but if the US does not comply with the joint statement, we will keep all options open to defend our interests," a European Commission spokesman told Chinese news agency Xinhua.

The spokesperson clarified that the EU is implementing its commitments under last year's agreement in accordance with the normal legislative process and is keeping the US administration informed throughout. Furthermore, Brussels is seeking clarity from Washington regarding its commitments under the agreement. Under last year's EU-US trade agreement, the EU agreed to suspend tariffs on US industrial products and implement tariff-rate quotas for agri-food products. In return, the US promised to impose a 15 percent import duty on most European products.

Tariffs on cars and trucks coming from the EU

Donald Trump announced on Friday that he has raised tariffs on cars and trucks coming from the European Union to 25 percent. He alleged that the EU is not following the existing trade agreement. Before departing on Marine One, Trump said, "We have raised tariffs on cars coming from the European Union because they were not following our trade agreement. This will bring billions of dollars to America and will force companies to rapidly shift their production to America."

Trump also said the move is aimed at encouraging global automakers to increase investment in the United States. He claimed that more than $100 billion worth of auto plants are currently under construction in the United States, a record. This includes investments from Japan, South Korea, Canada, and Mexico.

Tensions between the US and the EU

This decision to increase tariffs is being seen as a new escalation in trade tensions between the US and the European Union, particularly in the auto sector, which has long been a bone of contention between the two sides. Experts believe that if this dispute escalates, it could impact global supply chains and economic stability.

PC: ABPNews