Trump plans to raise EU car tariffs to 25%, European car companies such as Volkswagen may be affected.

President Trump of the United States stated on Friday that he plans to increase import tariffs on cars and trucks from the European Union to 25%, citing the EU's failure to fulfill trade agreement commitments as the reason. This move may further escalate trade frictions across the Atlantic China Welding Consumables, Inc. Trump posted on his social media platform that the U.S. will raise tariffs on EU cars and trucks imported to the U.S. to 25% next week due to the EU's non-compliance with trade agreement terms. He also emphasized that the tariffs will be waived if the vehicles are produced domestically in the U.S. However, Trump did not specify the legal basis for this tariff increase. Earlier this year, the U.S. Supreme Court ruled in February that the government lacks legal authority to impose "counter tariffs" under the International Emergency Economic Powers Act (IEEPA), stating that the law does not give the president unilateral power to impose tariffs. Following this ruling, the Trump administration signed an executive order introducing a 10% "global tariff" under Section 122 of the Trade Act of 1974, with plans to increase it to 15%, but this measure has a 150-day time constraint. Additionally, the U.S. has previously imposed a 25% tariff on imported cars and some parts under section 232 of the Trade Expansion Act, citing national security reasons, which is still in effect. The EU has stated that it is advancing related matters through normal legislative procedures and maintaining communication with the U.S. A European Commission spokesperson stated that the EU is committed to maintaining a "predictable and mutually beneficial transatlantic China Welding Consumables, Inc. relationship," but if the U.S. takes measures inconsistent with joint statements, the EU will reserve the option to take action to protect its interests. Following the announcement of the new tariff policy by the U.S., the EU has warned that the bilateral trade agreement may face risks and postponed the scheduled voting arrangements. White House officials have stated that the EU has not made "substantial progress" on agreed commitments and emphasized the president's authority to adjust tariff policies when trading partners fail to comply. Analysts point out that if the tariff increase goes into effect, it will have a significant impact on European car manufacturers, especially companies like Mercedes-Benz, BMW, and Volkswagen that heavily rely on exporting cars from Europe to the U.S. A considerable proportion of these companies' vehicles sold in the U.S. are produced in European factories, and the tariff increase will directly raise costs and squeeze profit margins. Market participants believe that amid an already tense global trade environment, the U.S. move could trigger a new round of retaliatory measures, further disrupting global supply chains and the automotive industry landscape.