US to Adopt 25% Car Levy ‘Soon’ Unless EU Clears Trade Deal

Newly manufactured automobiles on the dockside at the port of Barcelona. (Angel Garcia/Bloomberg)

U.S. Ambassador to the EU Andrew Puzder said Washington will implement 25% tariffs on cars and trucks from the European Union “relatively soon” if the bloc doesn’t swiftly ratify a long-delayed trade deal. 

“Unless we see some substantial progress, I think you probably should expect those relatively soon,” Puzder told Bloomberg Television. 

President Donald Trump recently vowed to slap 25% tariffs on European vehicles, accusing the bloc of taking too long to ratify the agreement, which was initially reached last July. The EU, meanwhile, is frustrated over several Trump moves it argues undermine Washington’s commitments under the pact.

Puzder’s comments add pressure to EU negotiators this week as they try to finalize proposed amendments to the deal. 

“What the president was saying was, ‘Look, this has gone on long enough,’ ” Puzder said. “You’ve done nothing for nine months.”

The potential car tariffs have brought long-standing transatlantic trade tensions to a head. 

With @USTradeRep Ambassador @jamiesongreer at the G7 in Paris - useful, important.

Would be beneficial for the main features of the EU-US deal to be in place ahead of its one-year mark.

Work is ongoing - we're stepping up engagement at both political and technical levels. pic.twitter.com/aRyiK0ClMu — Maroš Šefčovič🇪🇺 (@MarosSefcovic) May 5, 2026

Under the original deal, the EU agreed to erase levies on U.S. industrial goods in exchange for a 15% tariff ceiling on most European products, including vehicles. A 25% car tariff would therefore violate that ceiling. 

The EU has warned it is ready to retaliate, but would prefer to de-escalate and preserve the existing pact — which the U.S. has partially implemented, but the bloc has not. On May 5, EU trade chief Maros Sefcovic told U.S. Trade Representative Jamieson Greer that the bloc wants the main parts of the agreement in place by July. Sefcovic also pushed Washington to respect previous trade commitments.

“I don’t know that July would be fast,” Puzder said. “I think the president’s saying he’s pushing for something more rapid, something quicker.”

Europe is also smarting over Washington’s decision to widen a 50% metals tariff to hundreds of products that include steel and aluminum, like motorcycles and tableware. The move didn’t explicitly violate any U.S. commitments, but many Europeans felt it nonetheless hollowed out the tariff ceiling. 

Recently, the U.S. attempted to address Europe’s frustration, changing how the tariff was calculated and exempting some products. But it did little to help, with officials saying the tweak actually made the situation worse for roughly half of the affected products.

Puzder said the two sides would continue discussing the matter. 

EU lawmakers are now negotiating with capitals over final amendments to the trade agreement, including a potential expiration date. Officials will meet in the evening May 6 for talks, but a final agreement was not expected until June.

Puzder chided the European Parliament for trying to “renegotiate the deal,” arguing “we’re done debating.”

The U.S. ambassador warned that Trump was willing to ditch the overall agreement if the EU imposes additional trade measures.

“If a deal isn’t a deal, then the United States, I think, would walk away from it,” he said.

Heightened car tariffs would particularly bite for Germany, an auto manufacturing base and the EU’s largest economy. 

“For us, the topic of auto manufacturing and exports, being an automotive location, is very central and I’m hopeful that we can also solve this challenge in a good way together,” German Economy Minister Katherina Reiche told reporters on May 6 in Paris, where Group of Seven trade ministers are meeting.

The strained transatlantic relationship is emblematic of how Trump has rearranged the global economic system. 

“We’re moving away from a balanced and stable international trade system,” French Trade Minister Nicolas Forissier said at the G-7 gathering. “Now we have a more difficult environment, unstable,” with “weaponization of mutual dependencies, and so we have to act accordingly.”

Trade is not the only area where transatlantic relations are souring. Trump has repeatedly threatened the NATO military alliance, trashed the EU’s tech rules and fumed at Europe’s refusal to provide military support for the U.S.-Israeli war against Iran. 

Trump even said he would yank 5,000 US troops from Germany after Chancellor Friedrich Merz said U.S. negotiators were being “humiliated” in talks with Iran.