Trump's tariff defeat, new tariffs: EU assesses consequences

Following the US Supreme Court's decision against president Donald Trump's tariff policy, the EU and other countries are attempting to assess the precise consequences for the global economy. A special session of the legal service and the negotiating team, which was responsible for a customs agreement between the US and the EU, is scheduled for Monday in the EU Parliament. Furthermore, chancellor Friedrich Merz (CDU) plans to discuss Trump's tariff policy during his visit to Washington in a few days.

In a historic ruling on Friday, the Supreme Court prohibited the US president from imposing tariffs on imports from many countries under an emergency act from the 1970s. This aggressive tariff policy is a key element of Trump's second term. He has announced that he will use other methods to continue enforcing his tariffs.

Trump wasted little time before making a new move. He initially announced a global tariff rate of 10 percent on imports into the US on Friday, only to increase it to 15 percent the following day. By doing so, the 79-year-old is fully utilising the maximum limit of a trade act from the 1970s that he is invoking.

US treasury secretary Scott Bessent told Fox News that tariff revenues would remain unchanged both this year and in the future.

What happens to trade agreements like the one with the EU?

Following the tariff setback, it is unclear which trade agreements will remain and which will not. The category into which the European Union falls is still undecided. The EU and the US had reached a customs agreement over the summer. This deal may now have lost its legal foundation.

The EU Commission demands that the US does not exceed the agreed tariff ceiling of 15 percent under any circumstances. EU products must benefit from the most competitive treatment possible, the Brussels-based authority stated. The Commission's communication read: “A deal is a deal.” It is demanding clarity on the United States' next steps following the recent Supreme Court ruling.

Wave of reclaims expected

Significant uncertainty regarding the impact has prevailed since the Supreme Court's decision. The ruling could trigger a wave of claims for tariffs that have already been paid. According to calculations by the University of Pennsylvania, the US national budget is facing a potential liability of approximately 175 billion US dollars.

Economic experts fear chaos should tens of thousands of claims from importers materialise. Bernd Lange, the chairman of the trade committee in the EU Parliament, also sees an opportunity for the repayment of unlawfully collected US tariffs. “Overpaid tariffs must be refunded,” he told Deutschlandfunk.

Merz to discuss tariff policy with Trump

Chancellor Merz also responded, stating he will discuss the tariff policy with Trump in Washington in a few days. “We will have a very clear European stance on this matter,” the CDU politician told ARD. This was after Trump's announcement of a global 10 percent tariff rate on US imports, and before Trump increased the rate. He added that there would be coordination within the European Union beforehand.

What tariffs will Trump now levy on other grounds?

Citing an emergency act from 1977, the US president has imposed tariffs on dozens of trading partners since the start of his second term, bypassing Congress. The Supreme Court did not issue a general ruling on tariffs. Instead, it decided whether Trump's justification based on the emergency act was lawful. It is now clear that he overstepped his authority.

The new tariff of 10 percent, later increased to 15 percent, introduced by Trump is now based on a trade act from 1974. This act permits the imposition of tariffs on imports for up to 150 days under specific conditions. Experts already doubt whether these conditions have been met. To impose tariffs for a longer period, Trump would require the approval of the US Congress in all circumstances.

Which tariffs will definitely remain in place?

The US Supreme Court did not rule on tariffs for specific products where the US government applied a different legal framework. Citing a section of the “Trade Expansion Act” of 1962, Trump imposed tariffs on items such as steel, aluminium and cars. These tariffs remain in effect.

This article was translated to English using an AI tool.

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