U.S. President Donald Trump said on Sunday he will impose new tariffs on European automobiles and consumer electronics, intensifying an already strained trade dispute with the European Union.

The move adds fresh pressure to transatlantic trade ties and raises the risk of higher costs for manufacturers, importers and consumers on both sides of the Atlantic. European automakers are among the industries most exposed to the new duties.

Trump framed the decision as part of a broader push to protect U.S. industry, but the announcement is likely to trigger another round of retaliation threats and negotiations with EU officials. The dispute comes as businesses are already facing uncertainty from shifting trade policy.

Markets and policymakers will now be watching for the EU response, as the new tariffs could deepen economic friction between two of the world’s largest trading partners.