U.S. President Donald Trump said Saturday that he will impose a 25% tariff on European Union car imports beginning next month, escalating trade tensions with one of Washington’s biggest economic partners. He also warned that additional measures could follow if the bloc retaliates against American goods.

The move targets a major export sector for Europe and could raise costs for automakers, suppliers, and consumers on both sides of the Atlantic. Trade disputes of this kind often ripple through supply chains, creating uncertainty for manufacturers already facing pressure from inflation, slower demand, and global competition.

Trump’s warning puts the EU in a difficult position: respond with counter-tariffs and risk a deeper trade fight, or hold back and absorb the hit. Brussels has not yet detailed its next steps, but any response would likely be aimed at pressuring Washington to reconsider.

The announcement adds fresh strain to U.S.-EU economic relations at a time when allies are also navigating broader disputes over industrial policy, market access, and national security rules. For now, the immediate focus is on whether both sides can avoid a wider tariff confrontation that could damage consumers and businesses far beyond the auto sector.