Last July, Donald Trump and Ursula von der Leyen shook hands at his Turnberry golf resort in Scotland. The deal set a 15% tariff ceiling on most EU goods, including cars. Ten months later, it’s over — killed by a Friday night social media post with no explanation of what went wrong.

“Based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States,” Trump wrote on Truth Social. The tariff rate: 25%, up from 15%. The timeline: next week. The justification: unstated.

Neither the White House nor the European Commission has explained what “non-compliance” means. The EU says it has been implementing the agreement “in line with standard legislative practice” and keeping the US informed throughout.

What Was Actually Agreed

The Turnberry Agreement was never the airtight pact its name suggested. It set a 15% ceiling on most EU goods — down from the 50% tariffs cars had been facing. In exchange, the EU agreed to eliminate tariffs on US imports, purchase $750 billion in American energy, and invest $600 billion in the US. Steel tariffs remained at 50%.

But the European Parliament never formally ratified it. The “trilogue” process — requiring sign-off from the Commission, the Council of EU leaders, and the Parliament — hasn’t concluded. A final vote wasn’t expected before June.

EU Trade Commissioner Maroš Šefčovič had just made a three-day visit to Washington, meeting Commerce Secretary Howard Lutnick, US Trade Representative Jamieson Greer, and Treasury Secretary Scott Bessent — his first trip since the deal was signed. He described the relationship as “more positive” over the past year, according to AP.

Who Bleeds

Germany’s automakers take the direct hit. Mercedes-Benz, BMW, and Volkswagen import a large share of the vehicles they sell in the US from European plants, according to CNBC. The EU estimated the deal would save European automakers €500 million to €600 million ($585 million to $700 million) per month. That calculus just collapsed.

Hildegard Müller, president of the German Association of the Automotive Industry (VDA), said the tariffs represent “a renewed and serious strain on transatlantic relations” and warned the costs “would likely also have an impact on consumers in the United States.”

She’s right. A 25% tariff means higher prices at American dealerships, thinner margins for manufacturers who absorb the hit, or both. Vehicles produced in US plants by European companies are exempt — which is the point. “It forces them to move their factory production much faster to the US,” Trump told reporters.

Detroit, in theory, gets a price advantage. In practice, transatlantic supply chains are deeply integrated, and disruption doesn’t stay on one side.

The Legal Tangle

What authority Trump will use remains unclear. The Supreme Court ruled 6-3 in February that the International Emergency Economic Powers Act — the legal basis for his “reciprocal” tariffs — “does not authorize the President to impose tariffs.” The administration then imposed a 10% global tariff under Section 122 of the Trade Act of 1974, with a 150-day time limit.

Scott Lincicome of the Cato Institute told AP the president would likely invoke Section 232 of the Trade Expansion Act of 1962, which allows duties on national security grounds — the same authority used to impose 25% auto tariffs in March 2025 before the EU deal lowered them.

Lincicome called Trump’s trade deals “vaporware. They all rely on handshakes and winks and hopes that Trump doesn’t get mad about something.”

A Fragile Moment

The tariff hike lands amid mounting economic pressure. The Iran war has driven up oil and gas prices after the effective closure of the Strait of Hormuz following US and Israeli strikes in late February. US annual inflation hit 3.3% in March — above what Trump inherited and above what he promised voters. Just 30% of US adults approve of his handling of the economy, per the latest AP-NORC poll.

Trump has simultaneously threatened to pull US troops from Italy and Spain and reduce deployments in Germany. The tariffs are one front in a broader transatlantic breakdown.

Bernd Lange, chair of the European Parliament’s trade committee, called the move proof of “just how unreliable the US side is.” The European Commission said it remains committed to the deal and will “keep our options open to protect EU interests.”

EU-US trade in goods and services totaled €1.7 trillion ($2 trillion) in 2024. Every country now negotiating with Washington has fresh evidence that a deal with this administration lasts only as long as the president’s mood. The Turnberry handshake held for ten months. The post took seconds.

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