Donald Trump is increasing the tariffs charged on cars and trucks from the European Union to 25% in a sharp escalation of trade tensions with Brussels.

The US president accused the EU of “not complying with our fully agreed to trade deal” in a post on Truth Social, but did not explain how.

“I am pleased to announce that… next week I will be increasing Tariffs charged to the European Union for Cars and Trucks,” Trump said on Friday.

In targeting the automotive sector Trump has chosen a particularly sensitive target, as car manufacturing makes up a significant proportion of Europe’s economy.

Talks about how to move forward on the EU-US deal, agreed last July, had stalled over a dispute about steel and aluminium. Major European economies such as Germany and France had rejected US plans to adjust tariffs on a wide range of goods.

The trade deal agreed between the EU and US, at Trump’s Turnberry golf course in Scotland, set levies on most European goods at 15%.

It was a reprieve for the EU from the 30% tariffs Trump had threatened to impose as part of his “Liberation Day” wave of tariffs that April.

In exchange, Europe had agreed to invest in the US and make changes on the continent expected to boost US exports.

As tensions mounted over President Trump’s threats to annex Greenland, a self-governing Danish territory, the European Parliament in January suspended the approval of the deal.

It later added a clause stating the agreement can be suspended if the Trump administration is deemed to have “undermined the objectives of the deal, discriminated against EU economic operators, threatened member states’ territorial integrity, foreign and defence policies, or engaged in economic coercion”.

It was approved by the European Parliament in March, following the dispute.

Asked how the EU had failed to adhere to the terms of its deal with the US, Trump did not elaborate.

He told reporters on Friday: “We have a trade deal with the European Union. They were not adhering to it. So I raised the tariffs on cars and trucks.”

Announcing the tariff hikes, Trump urged European carmakers to shift production to the US.

“It is fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF,” his Truth Social post read.

He said billions of dollars are being invested in car and truck plants across the country, figures he described as “a record in the history of car and truck manufacturing”.

“There has never been anything like what is happening in America today,” Trump added.

Trump’s Liberation Day tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), have since been ruled illegal by the Supreme Court, with firms that paid up now seeking refunds after a Supreme Court decision.

But the tariffs affecting cars fall under a different legal process, and are not impacted by the Supreme Court ruling. (BBC)