The American tariff wall has not fallen; it has simply changed its legal foundation. Last weekend’s US Supreme Court ruling was a landmark for constitutional limits in US trade history, and briefly signalled a crisis in US tariffs strategy. However, President Trump was quick enough to find another legal basis on which to pursue his commercial agenda and caused, once again, a shift in transatlantic relations.
What happened over the weekend?
The decision of the US Supreme Court to invalidate President Trump’s “Liberation Day Tariffs” marks more than a domestic constitutional episode. It represents yet another geopolitical stress test for the transatlantic economic order.
On 20 February, in a 6–3 ruling, the Court found that the President had exceeded his authority under the International Emergency Economic Powers Act (IEEPA) by imposing the so-called retaliation tariffs on nearly all US trading partners on 2nd April 2025. While IEEPA allows the President to regulate economic transactions in response to an unusual and extraordinary threat, the Court held that it does not authorise the unilateral introduction of broad-based tariffs in the commercial circumstances at hand. The ruling therefore legally invalidated the tariffs introduced on “Liberation Day”.
Sectoral tariffs, such as those on aluminum and steel, were however out of the scope of the US Supreme Court, as they were imposed by the US administration under a different legal instrument: section 232 of the Trade Expansion Act of 1962. As a result, they currently remain in place.
At first glance, the judgment demonstrates the resilience of American institutional checks and balances. It clarifies constitutional limits and reaffirms the role of Congress in trade policymaking. For European observers concerned about executive overreach, this is a meaningful signal that the US legal order remains anchored in procedural constraints.
Trump’s reaction and new tariffs
Yet the tariffrelief was short-lived. Within hours of the ruling, President Trump pivoted to a new legal basis, invoking Section 122 of the Trade Act of 1974 to impose a 10% global tariff on foreign goods entering the United States. Section 122 allows the President to act against a large and serious balance-of-payments deficit for a maximum of 150 days, unless Congress authorises an extension. Exemptions were granted for selected critical minerals, certain agricultural and pharmaceutical goods, aerospace products, and items covered by Section 232 measures under the Trade Expansion Act of 1962. The administration also confirmed the suspension of de minimis treatment for goods under $800, bringing those imports within the tariff’s scope.
Through a post on his Truth Social platform, President Trump floated the possibility of increasing the rate to 15%, although no formal implementation has followed so far. Moreover, the Supreme Court did not order the reimbursement of previously collected duties, leaving earlier payments untouched.
Brussels’ reaction to the ruling
From a European perspective, the sequence of imposition, judicial invalidation and immediate reimposition under a different statute reinforces the perception of volatility in US trade governance.
This dynamic has already had its effects in Brussels. The European Parliament has halted its vote on legislation implementing the EU’s side of the EU–US trade agreement, following calls from the Chair of the International Trade Committee, Bernd Lange, for legal clarity and firm commitments from Washington. While a March plenary vote remains on the agenda, no timeline has been confirmed. At the same time, the Commission issued a strongly worded statement requesting clarity on the steps the US Presidency intends to take, and trade Commissioner Maroš Šefčovič has stressed the importance of fully respecting the EU–US agreement to preserve stability in transatlantic relations.
Geopolitical Implications
The broader geopolitical implication is that the EU is likely to intensify its diversification strategy. Engagements with Mercosur partners, India, and other economies take on increased strategic weight. While the EU remains committed to the Turnberry deal agreed in July, internal EU instruments such as the Anti-Coercion Instrument, foreign direct investment screening, and the foreign subsidies regulation may gain relevance in an environment where trade policy is increasingly intertwined with strategic autonomy.
What It Means for Businesses
For companies operating across the Atlantic, the legal and political narrative translates into immediate commercial consequences. Although the Supreme Court’s decision provides constitutional clarity regarding the limits of IEEPA, it does not restore the pre-tariff status quo. The new 10% global tariff raises the baseline cost of exporting to the United States, and the suspension of de minimis treatment extends its reach even to lower-value consignments. This becomes particularly relevant considering that the new 10% global tariff will be applied on top off the Most Favoured Nation tariffs already in force under World Trade Organization rules.
The temporary nature of Section 122 authority introduces an additional layer of uncertainty. The tariffs may lapse after 150 days unless Congress approves their continuation. Businesses must therefore plan for multiple scenarios: extension, escalation to 15%, or the exploration of alternative legal routes such as Section 301 investigations under the 1974 Trade Act, which empowers the United States Trade Representative to impose tariffs upon specific products to deter certain foreign trade practices. Each scenario carries distinct compliance, pricing, and supply chain implications.
Moreover, the absence of any obligation to refund duties already paid underscores a hard commercial reality. Even when measures are invalidated, financial exposure may remain.
Companies with integrated supply chains spanning the EU and US markets may need to reconsider sourcing decisions, stockpiling strategies and customs planning. At the same time, EU-based businesses should closely monitor how Brussels responds, particularly if defensive instruments or retaliatory measures enter the policy debate.
In this environment, reactive compliance is no longer sufficient. Strategic anticipation of trade policy developments, both in Washington and Brussels, becomes a competitive advantage. Engagement with policymakers, structured monitoring of legislative processes and coordinated advocacy are increasingly central to corporate risk management.
In a playing field such as the European one, where the private sector can actively follow and participate in the developments of trade policies that follow a structured policy process, Public Affairs should be a priority. Contact us to learn more about how we can help you.
Alessandro Pizzi, Public Affairs Consultant