President Trump said Friday that he plans to raise the tariff on vehicles imported from the European Union, claiming that the 27-nation trading bloc has failed to live up to the terms of a trade agreement with the United States.
“I am pleased to announce that, based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States,” Trump said on his social media platform. “The Tariff will be increased to 25%.”
Speaking to reporters at the White House as he headed to Florida, Trump suggested that the EU is failing to invest enough in U.S. car production, warranting the punitive tariff hike. Trump claimed that multiple auto factories backed by $100 billion will soon open in the United States, saving the foreign automakers making those investments from having to pay tariffs on imports, but EU nations are not among the major investors. Trump said the tariff increase would force EU automakers to “move their factory production much faster” to the United States.
Several major European automakers already have a significant manufacturing footprint in the United States, including Volkswagen, Mercedes-Benz, Volvo and BMW. Their facilities, however, tend to be assembly plants that rely on a mix of foreign and domestic parts, while the Trump administration has stated that it wants automotive supply chains to be anchored domestically.
In pursuit of a better deal: The tariff on EU auto imports was set at 15% last summer, when European Commission President Ursula von der Leyen reached an agreement with Trump that included a 15% tariff on most EU goods and a pledge by EU nations to purchase $750 billion worth of energy from the United States and make $600 billion in investments in the U.S. economy. Some EU member nations have balked at the agreement, however, raising questions about its final approval, and the U.S. Supreme Court’s ruling that some of Trump’s tariffs are unconstitutional has muddied the waters further still.
Trump’s announcement highlights the uncertainty surrounding Trump’s trade agreements, which have been closer to outlines than detailed contracts. Bernd Lange, the German member of the European Parliament who chairs the EU’s international trade committee, said the announcement shows that the United States has become downright unreliable on trade matters. “This is no way to treat close partners,” he said, per The Guardian. Writing on social media, Lange claimed that the EU is honoring its end of the agreement as the member nations work to finalize it. “While the EU delivers, the US side keeps breaking its commitments,” he said.
Some U.S. critics of Trump’s trade policy also see a troubling sign of instability in the way the president has wielded trade policy. Scott Lincicome, a lawyer who advocates for free trade at the libertarian Cato Institute, said Trump’s threats are “just another example of why these trade deals are vaporware.” The agreements “all rely on handshakes and winks and hopes that Trump doesn’t get mad about something,” he said, per the Associated Press.
Trump has recently expressed anger at European allies for their reluctance to support the war against Iran launched in February by the United States and Israel, and that disagreement could have added to Trump’s motivation in punishing EU member nations with a higher tariff on auto imports.
Easing up on whiskey: On Thursday, at the end of what appeared to have been an amiable four-day visit from King Charles III and Queen Camilla, Trump announced that he would eliminate the tariff on British whiskeys.
“In Honor of the King and Queen of the United Kingdom, who have just left the White House, soon headed back to their wonderful Country, I will be removing the Tariffs and Restrictions on Whiskey having to do with Scotland’s ability to work with the Commonwealth of Kentucky on Whiskey and Bourbon, two very important Industries within Scotland and Kentucky,” Trump said on his social media platform.
The U.K. government said the change applies to all whiskey tariffs, including those made in Northern Ireland.
Under the terms of a trade agreement announced last year, all British imports faced a 10% tariff. The tariffs hit British whiskey producers hard, with the Scotch Whisky Association saying its members were losing out on more than $5 million in exports per week due to higher prices.
A spokesperson for King Charles said he had been informed about Trump’s “warm gesture,” which will aid the British whiskey industry. “His Majesty will be raising a dram to the President’s thoughtfulness and generous hospitality as he departs the U.S.,” the spokesperson said.