The executive order, signed Sunday, targets $370 billion in European goods effective April 7. Germany's auto sector faces the steepest exposure. The EU's trade commissioner is calling it "an act of economic hostility."
President Trump signed an executive order on Sunday imposing a 25% tariff on most manufactured goods imported from the European Union, with a lower 10% rate on agricultural products. The order takes effect April 7, giving American importers two weeks to adjust purchasing and logistics plans, though most supply chain experts say that timeline is functionally impossible to navigate without absorbing significant cost increases.
The announcement came via a Truth Social post at 11:14 p.m. Saturday night — "The EUROPEAN UNION has been ripping off the United States for DECADES. No more free rides!" — before any formal briefing to Congress or allied governments. The Commerce Department published the full executive order text on its website at 6:30 a.m. Sunday.
The EU's trade commissioner, Maros Sefcovic, issued a statement within hours: "These tariffs are an act of economic hostility against our closest trading partners. The European Union will respond in kind, and we will do so with purpose." EU member state trade ministers were convened for an emergency call Sunday afternoon. A 72-hour deadline for a formal EU response has been set, after which Brussels plans to announce retaliatory measures targeting American exports.
“A 72-hour deadline for a formal EU response has been set, after which Brussels plans to announce retaliatory measures targeting American exports.”
What's on the line is substantial. The US imported roughly $370 billion in EU goods in 2025. Germany is the most exposed, with automotive exports to the US — primarily BMW, Mercedes-Benz, and Volkswagen Group vehicles — accounting for approximately $55 billion annually. The German auto sector was already navigating a bruising electrification transition and the lingering effects of the 2024-2025 European recession. A 25% tariff on top of that is potentially catastrophic for manufacturers whose factory retooling timelines are measured in years, not weeks.
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Key Takeaways
→trump tariffs: Most manufactured goods from the EU face a 25% tariff, while agricultural products face 10%.
→eu trade war: Most manufactured goods from the EU face a 25% tariff, while agricultural products face 10%.
→trade policy: Most manufactured goods from the EU face a 25% tariff, while agricultural products face 10%.
→european union: Most manufactured goods from the EU face a 25% tariff, while agricultural products face 10%.
France faces secondary exposure through luxury goods, aerospace (Airbus), and pharmaceuticals. Italy's apparel and wine industries — already squeezed by Chinese competition — will absorb the agricultural component even at the lower 10% rate. Ireland, somewhat counterintuitively, may be the EU nation least affected by this round. Its exports to the US are dominated by pharmaceutical products manufactured there by US-headquartered multinationals for tax purposes, and the administration has consistently shown reluctance to target those particular supply chains.
The White House framing is familiar: "reciprocal trade" and a "level playing field." US Trade Representative Jamieson Greer cited the EU's value-added tax structure as a de facto trade barrier, along with agricultural standards that block American beef and genetically modified crops. These arguments have circulated in policy circles for years and are not factually wrong — they just don't map cleanly onto a blunt 25% tariff applied across all manufactured categories regardless of specific bilateral trade imbalances.
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The financial markets were direct about their assessment. European equities opened Monday sharply lower: Germany's DAX fell 3.7%, France's CAC 40 dropped 3.2%, and the Euro Stoxx 50 declined 3.4%. US futures fell in sympathy, which is not surprising — investors understand that trade wars impose costs on both sides. The dollar strengthened against the euro and pound, which is actually counterintuitive given that tariffs are supposed to help American producers; currency appreciation makes US exports more expensive abroad and partially offsets any domestic protective benefit.
This is at least the third major tariff escalation with the EU since Trump's second term began in January 2025. The initial "baseline tariff" order imposed 10% on all imports from most countries. A March 2025 action reinstated steel and aluminum sector-specific levies. Sunday's order represents a full escalation to the threshold economists had been warning about since the campaign. Each prior step produced a cycle: EU threats, partial retaliation, then quiet negotiation without a durable resolution. Whether this round breaks that pattern is genuinely unknown.
The EU enters this round with measurably less leverage than it had in 2018-2019. Its economy is weaker, internal politics in Germany and France make it harder for governments to be seen accommodating Washington, and the 72-hour ultimatum is partly theater. Substantive negotiations, if they happen, will take weeks or months. For American consumers, the practical effect will show up first at auto dealerships and electronics retailers, where prices on European-manufactured goods will rise as importers pass through some portion of the new costs. Wine and spirits importers are already placing large front-loaded orders before April 7.
Most manufactured goods from the EU face a 25% tariff, while agricultural products face 10%. German automobiles, French luxury goods, Airbus aircraft, and European pharmaceuticals are among the highest-exposure categories. The tariffs take effect April 7, 2026.
How will the EU retaliate against US tariffs?
The EU has historically retaliated by targeting politically visible American exports — bourbon whiskey, Harley-Davidson motorcycles, Levi's jeans, and agricultural products from swing states. The EU's formal response window is 72 hours; retaliatory tariffs targeting American goods could follow shortly after.
How will Trump's EU tariffs affect car prices in the US?
Vehicles manufactured in Europe and exported to the US — primarily German luxury brands like BMW, Mercedes-Benz, and Porsche — will see cost increases that dealers may partially or fully pass on to buyers. Depending on the model and dealer margins, price increases of $3,000–$8,000 per vehicle are possible.
