U.S. President Donald Trump has escalated trade tensions with the European Union (EU) by increasing tariffs on European cars and trucks to 25%, up from the previous 15% rate established in a trade agreement last year. Trump announced this decision on Truth Social, claiming the EU failed to honor the deal. The new tariffs will not apply to vehicles manufactured in the United States. Following the announcement, Bernd Lange, head of the European Parliament’s international trade committee, criticized Trump’s actions, labeling them as unacceptable and indicating that the EU would respond firmly. The core of the dispute lies in accusations from both sides regarding compliance with the trade agreement reached in Scotland last July. While Trump accuses the EU of non-compliance, EU officials assert that the U.S. has breached the agreement. The announcement has caused a decline in shares of major U.S. automakers, including Ford, Stellantis, and General Motors. The tariffs are imposed under Section 232 of the Trade Act of 1964, which allows for tariffs on national security grounds, and remain unaffected by recent court rulings against broader tariff measures. This escalation raises concerns about a potential trade war between the U.S. and the EU as both sides remain entrenched in their positions.