Washington continues with plans to increase tariffs on cars from the European Union

(Patria) - U.S. Trade Representative Jamieson Greer told European Union and German trade officials over the weekend that the United States will proceed with President Donald Trump's plan to increase tariffs on car imports from the European Union to 25%, according to a statement published on Monday by CNBC, Reuters reported.

"I was in contact with European and German trade officials this weekend to help them understand why this is happening and reminded them of all the conversations we have had about their compliance," Greer told CNBC in an interview.

"I will continue to have those conversations, but the president is proceeding with this action."

When asked whether the tariff should be considered only part of larger negotiations or a permanent state, Greer added: "It is one part of the deal."

Trump said on Friday that he would increase tariffs on cars from the European Union to 25% from the previously agreed 15% next week, saying Brussels had not complied with the trade agreement with Washington.

The European Commission rejected Trump's claim that Brussels is not complying with last year's trade agreement and announced that it would keep its options open to protect the interests of the European Union if Washington violates the terms of the agreement.

Trump is talking about imposing tariffs amid escalating tensions between the US and the EU over the war in Iran and the refusal of European countries to send a navy to open the Strait of Hormuz. The White House announced on Friday that it plans to withdraw 5,000 U.S. soldiers from Germany after German Chancellor Friedrich Merz said Iran was "humiliating" the U.S. in negotiations to end the war.

The Trump administration last year imposed a 25% tariff on global car imports under the national security trade law, but in August reached a separate agreement with the European Union to reduce those tariffs to a net 15%, including previous tariffs.

Shares of German car manufacturers fell on Monday after Trump's decision to increase U.S. tariffs on European car imports to 25% from the previously agreed 15%, dealing another blow to an already hard-hit sector.

The pan-European auto and parts index fell 2.3% as of 10:46 GMT, while shares of Porsche, BMW, Mercedes-Benz, and Volkswagen fell two to three percent.