We thought the matter was settled. In July 2025, Trump and Ursula von der Leyen concluded what became known as the Turnberry agreement, named after the Scottish golf course owned by the American billionaire. Tariffs on European cars were capped at 15%, while other countries were still paying 25%. The European car industry breathed a sigh of relief, estimating savings of between 500 and 600 million euros a month thanks to the deal.
Ten months later, it is being called into question. On 1 May, Trump announced on TruthSocial that he wants to raise these tariffs to 25% “next week”, accusing Europe of not keeping its commitments. This announcement can be read on several levels, and they are worth a closer look.
What exactly happened
The Turnberry agreement was never formally ratified by all the member states of the European Union. Two events complicated its implementation. First, the US Supreme Court partly struck down certain sector-specific tariffs decreed by the executive, ruling that Trump had overstepped his powers. Then, European MEPs finally approved the agreement at the end of March 2026, but attached numerous conditions and a sunset clause set for March 2028.
Trump, for his part, found another pretext. He accuses several European countries, including Germany, Spain and Italy, of refusing to contribute militarily or logistically to US operations in the Strait of Hormuz against Iran. A row with German Chancellor Friedrich Merz a few days earlier, after Merz had criticised the US strategy in Iran, clearly lit the fuse.
“European carmakers have been in the firing line since the start of the tariff talks. They are already under technological and competitive pressure, particularly in the electric vehicle sector against Chinese players.” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, May 2026
Why the car industry is always the favourite target
It is no coincidence that Trump keeps coming back to cars whenever he wants to put trade pressure on Europe. The sector is strategically visible, economically massive and geographically concentrated in Germany, which makes it a particularly effective bargaining lever.
The United States is the European car industry’s largest export market by value: 38.9 billion euros a year. Germany, Europe’s largest producer, exported around 450,000 vehicles a year to the United States before the tariff crisis. BMW, Mercedes, Audi, Porsche and Volkswagen are the most directly exposed, with premium ranges strongly represented in a high-margin US market.
Taxing European cars means hitting where it hurts most while staying popular with American voters, who see it as a defence of local manufacturing jobs. Trump’s message is crystal clear: “Produce in the United States and you won’t pay anything.” It is a direct invitation to move production.
What this actually changes for carmakers
€38.9bn = value of European car exports to the United States
15% to 25% = the announced increase in tariffs on European vehicles
€500 to 600m a month = savings lost if the Turnberry agreement is abandoned
For carmakers, the choice is brutal: absorb the extra cost by squeezing margins that are already under pressure, or pass it on to US retail prices and risk losing volume in a highly competitive market. BMW already has a plant in Spartanburg, South Carolina, and Mercedes one in Tuscaloosa, Alabama. These sites could ramp up production to get around the tariffs, but setting up new production lines takes several years, which leaves a significant period of vulnerability in 2026 and 2027.
The German car industry was quick to call for de-escalation. “These announcements would mean enormous costs for the car industry, which is already facing very difficult conditions,” said Hildegard Müller, president of the German car lobby VDA. For Stellantis, which exports its Fiats and Alfa Romeos to the United States from Italy, the situation could even speed up a partial withdrawal of these two brands from the US market, where their sales are already marginal.
Belgium: more exposed than you might think
In Belgium, you might think this is mainly a German problem. That is partly true, but Belgium is far more exposed than it seems, for two reasons.
The first is local production. Volvo’s Ghent plant assembles, among others, the EX30 SUV, partly intended for the US market. A tariff increase directly affects this model’s competitiveness in the United States and could influence production volume decisions in Ghent. The Audi and Volkswagen plants in Belgium are in a similar situation.
The second is the port of Antwerp. One of Europe’s largest ports, it plays a major transit role for hundreds of thousands of vehicles exported to the United States every year. A drop in transatlantic car flows would be felt directly in Antwerp’s port activity and across the whole logistics chain that depends on it.
⚠️ The risk of knock-on effects on prices in Europe: if carmakers lose volume and margin in the US market, they will look to make up for it elsewhere. Europe, and Belgium in particular, could see new car prices rise in the coming months, regardless of any other factor. It is an indirect mechanism, but a very real one.
Negotiating stance or real measure? The big question
The whole difficulty with Trump’s trade announcements is that it is often impossible to know in advance whether they will be carried out or whether they serve as a bargaining lever. Recent history calls for caution in both directions: some threats were applied in full, others came to nothing after intense behind-the-scenes negotiations.
What is certain is that the financial markets did not wait to react. European stock markets fell on Monday 4 May, led by the car sector, with significant losses for BMW, Stellantis, Volkswagen and Renault. Investors have priced in a risk premium, even though the measure is not yet officially in force.
The European Commission quickly responded with what is now its usual line: “A deal is a deal.” Brussels has not announced any immediate retaliatory measures, but talks will resume urgently. The EU has its own levers, notably the tariffs it has imposed on Chinese electric vehicles, which could be used as a bargaining chip.
What this means for a buyer in Belgium today
In the short term, for anyone looking to buy or sell a car in Belgium, the direct impact of these tariffs is limited: they concern European exports to the United States, not the Belgian domestic market. But in the medium term, two indirect effects are worth watching.
First, if carmakers suffer losses in the US market, they may be tempted to scale back their distribution networks in Europe or reduce the usual discounts on the Belgian market. Second, a trade war that drags on creates uncertainty in spare parts supply chains, which always ends up affecting lead times and maintenance costs.
This context also strengthens an argument you often hear from car agents: at a time of uncertainty over new car prices, the used car market becomes even more attractive. Well-maintained Belgian used cars, with a complete Car-Pass and a transparent history, are a safe haven that largely escapes international trade turbulence.
💡 What to watch in the coming weeks: the EU’s official response and the actual date the new tariffs come into force. Trump said “next week” on 1 May, but history shows that such announced deadlines often slip in practice. Negotiations between Brussels and Washington are set to intensify.
FAQ
It is the trade deal concluded in July 2025 between Trump and Ursula von der Leyen at Trump’s Scottish golf course, which capped tariffs on European cars and spare parts at 15%. Trump now accuses Europe of not respecting its terms, particularly regarding the military contribution of certain European countries to US operations in the Strait of Hormuz. The agreement had in fact never been formally ratified by all EU member states.
The most exposed are the German carmakers: BMW, Mercedes, Audi, Porsche and Volkswagen, which export large numbers of premium models to the United States. Volvo Cars is also in the firing line, notably for the EX30 SUV assembled in Ghent, Belgium. For Stellantis, the Fiats and Alfa Romeos sold in the United States from Italy could end up being withdrawn from the US market, as their volumes there are already marginal.
Not directly. The tariffs concern European exports to the United States, not the Belgian domestic market. But if carmakers lose volume and margin across the Atlantic, they may try to compensate by cutting discounts in other markets or limiting promotions. In the medium term, an indirect effect on prices in Europe cannot be ruled out, even if it is hard to quantify today.