Investing.com -- President Donald Trump announced Friday that tariffs on European Union cars and trucks entering the United States will increase to 25% next week, citing the EU’s failure to comply with an agreed trade deal.

The president said the tariff hike applies to vehicles imported from the EU, while cars and trucks manufactured at U.S. plants will face no tariffs. Trump stated that over $100 billion is currently being invested in American automobile and truck manufacturing plants, which he described as a record in the industry’s history.

The United States and the European Union finalized a trade agreement in August 2025 that set a 15% tariff on autos and auto parts, with terms taking effect retroactively to August 1, 2025. The framework was announced on August 21, 2025, and was intended to reduce tariffs from previous levels and resolve trade disputes.

Trump has recently criticized NATO’s support for the Iran war and maintained a strained relationship with German Chancellor Friedrich Merz. On Thursday, Trump told Merz to focus on the Russia-Ukraine conflict and domestic issues rather than involving himself in the Iran war.