United States President Donald Trump has said he will increase tariffs on automobiles from the European Union to 25 per cent.

The announcement on Friday could jolt the world economy at a time when it is already fragile from the knock-ons of the US-Israel war with Iran.

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It came months after the US and the EU had forged a trade deal as Trump imposed sweeping reciprocal tariffs on trade partners across the world. The agreement set tariffs on most goods at 15 percent, lower than the 30 percent Trump had previously threatened.

In a post on Truth Social, Trump accused the EU of “not complying with our fully agreed to Trade Deal”, without providing further details.

Trump added that he “fully understood and agreed that, if they produce Cars and Trucks in U.S.A. Plants, there will be NO TARIFF”.

The European Union did not immediately respond to the announcement.

⁠The ⁠president of Germany’s VDA auto association, Hildegard Mueller, meanwhile, ⁠urged the US and ⁠EU to honour ‌the existing trade agreement and to quickly resolve the issue.

Mueller said the cost of ⁠additional tariffs would ⁠be enormous and would likely impact US consumers.

The US-EU deal, dubbed the Turnberry Agreement after Trump’s golf course in Scotland, had already been questioned after the US Supreme Court ruled that Trump lacked the authority to declare a national emergency to justify many of his tariffs.

The ruling lowered the ceiling on EU tariffs to 10 percent.

Still, both sides had appeared committed to the agreement prior to Trump’s announcement.

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The EU had said it expected the bilateral deal would save European automakers about 500 to 600 million euros ($587m to $704m) per month.

Trump said the new tariff rate would go into effect next week.

The US president launched his aggressive tariff campaign last year, framing the move as a hard reset to boost domestic industries.

Experts have said progress towards that goal has been largely muted, while critics have noted the tariff fees have been footed by US businesses, which then pass the costs to consumers.

Following a court order, the Trump administration was expected to soon begin issuing the first of an estimated $166 billion in tariff refunds to companies that directly paid the duties.