Donald Trump has reignited the most dangerous front in his global trade offensive, announcing a sharp increase in tariffs on cars and trucks imported from the European Union to 25 per cent, up from the 15 per cent agreed under a previous understanding. The measure, set to take effect next week, was unveiled via a characteristically blunt post on Truth Social in which the American president accused the EU of failing to honour a bilateral trade deal struck last summer with European Commission President Ursula von der Leyen. The move has rattled financial markets, sent automakers’ shares sliding, and thrown the future of transatlantic commerce into renewed doubt.

Viewed from Brussels, the tariff hike is both a provocative rupture and a test of the EU’s resolve. European officials swiftly rejected Washington’s charge of non-compliance, insisting that the bloc has upheld its side of the accord. While they have stopped short of immediate retaliation, the European Commission has made it clear that countermeasures are being prepared. Analysts in London note that the EU’s measured response reflects a desire to avoid a full-blown trade war, but the underlying warning is unmistakable: Brussels will defend its industrial base, particularly the automotive sector, which sends hundreds of thousands of vehicles to the United States each year.

From Berlin’s perspective, the impact is especially stark. Germany, home to premium manufacturers such as Volkswagen, BMW, and Mercedes-Benz, stands to be the hardest hit. A quarter of all EU automotive exports to the US are German-built, and a 25 per cent tariff would sharply erode profit margins and potentially force production shifts. Trump’s accompanying offer — that vehicles built at American plants will face no tariff — is seen in Frankfurt as a coercive incentive to relocate manufacturing, reinforcing a pattern of ultimatums that has defined his trade policy.

The immediate market reaction was cautious but telling. Shares of European automakers dipped amid warnings from analysts that the tariff could depress demand and squeeze supply chains. Yet the longer-term implications are more profound. Should the EU follow through with retaliatory tariffs on American goods — from bourbon to heavy machinery — the conflict risks spiralling into a broader trade war that would disrupt global supply networks and raise costs for consumers on both sides of the Atlantic.

Forward-looking analysis from trade experts in Zurich and Paris suggests that the coming weeks will determine whether this escalation becomes a permanent rupture or a bargaining chip. Trump’s insistence on renegotiating terms from a position of strength, combined with the EU’s historical tendency to seek negotiated settlements, may yet produce a last-minute compromise. But the pattern established in previous disputes — tariff threats, retaliation, then talks — has eroded trust. What is different this time is the scale and speed of the escalation, and the fact that the automotive industry, a cornerstone of European manufacturing, is now directly in the crosshairs. The question for Brussels is not whether to respond, but how to do so without igniting a fire that neither side can easily extinguish.