World leaders hold their breath for Trump’s next tariff move 

BRUSSELS — America’s trade partners expressed quiet relief at the Supreme Court’s rebuke of President Donald Trump’s tariffs on Friday, but they are already bracing for his next trade salvo.

In a bombshell 6-3 ruling, the top U.S. court struck down the sweeping “reciprocal” tariffs Trump imposed on trading partners last year, when he imposed a 15 percent baseline tariff on most EU goods and a 10 percent duty on U.K. exports. 

The decision — which applies to tariffs imposed under the International Emergency Economic Powers Act (IEEPA) — does not affect sector-specific duties on sectors like steel, aluminium and automotive.

The European Union rushed to appeal for trade stability in the wake of the ruling, calling for “predictability in the trading relationship.” 

Brussels said it was in touch with the Trump administration as it seeks “clarity on the steps they intend to take in response to this ruling,” European Commission Deputy Chief Spokesperson Olof Gill said in a statement.

The U.K. — which, together with Australia, was hit by the lowest reciprocal tariff rate — downplayed the impact, saying it expected its “privileged trading position with the U.S. to continue,” despite the ruling. 

“This is a matter for the U.S. to determine but we will continue to support U.K. businesses as further details are announced,” a U.K. government spokesperson said, adding that it was working with the Trump administration to “understand how the ruling will affect tariffs for the U.K. and the rest of the world.”

Initial reactions from other capitals reflected a common desire to avoid any fresh escalation after Trump’s tariff offensive upended the postwar trade order and shook the trust of America’s closest allies.

Trump’s Plan B

Trading partners, however, broadly expect that Trump will find a way to impose replacement tariffs by the legal means at his disposal — for instance via so-called Section 232 investigations, which in the past were used to impose tariffs on foreign steel and aluminum.

“We were indeed monitoring this decision. However, we expect the U.S. administration to use other legal instruments to reinstate its tariffs,” a French diplomat told POLITICO.

A Washington-based Asian diplomat said their government was eyeing warily the possibility that the administration will pivot to impose fresh tariffs under Sections 301 and 232.

That view was shared by Bernd Lange, the top trade lawmaker in the European Parliament.

“I’m sure that the administration is now looking for Plan B, so that they use other legal bases like Sections 232 or 301,” said the German Social Democrat, who chairs the chamber’s trade committee. 

“I’m sure that the administration is now looking for Plan B, so that they use other legal bases like Sections 232 or 301,” said Bernd Lange, who chairs the chamber’s trade committee. | Jean-Christophe Verhaegen/AFP via Getty Images

European negotiators, aware the sweeping tariffs imposed by Trump on “Liberation Day” last April were open to legal challenge, sought to make the trade deal struck at his Scottish golf resort last July resilient to legal jeopardy. This included a maximum, “all-inclusive” U.S. tariff of 15 percent on most exports.

But uncertainty persists over the deaI, under which the EU would scrap duties on U.S. industrial goods. It is still stuck in the European Parliament — with a high-stakes vote expected early next week. 

For Canada, the ruling reinforces its position that Trump’s tariffs are “unjustified,” said Canada-U.S. Trade Minister Dominic LeBlanc.

“While Canada has the best trade deal with the United States of any trading partner, we recognize that critical work lies ahead to support Canadian businesses and workers who remain affected by Section 232 tariffs on steel, aluminum and automotive sectors,” LeBlanc said in a statement. 

He added Canada’s relationship with America is currently going through a “period of transformation.”

Business uncertainty

For companies doing business in the United States, the greatest concern is uncertainty.

For Canada, the ruling reinforces its position that Trump’s tariffs are “unjustified,” said Canada-U.S. Trade Minister Dominic LeBlanc. | Yuri Cortez/AFP via Getty Images

William Bain, head of trade policy at the British Chambers of Commerce, which represents over 50,000 British businesses, said the ruling “does little to clear the murky waters for business,” pointing out that the president could theoretically use the 1974 Trade Act to impose even higher tariffs on the U.K.

“The court’s decision also raises questions on how U.S. importers can reclaim levies already paid and whether U.K. exporters can also receive a share of any rebate depending on commercial trading terms,” he added.

A lobby group representing the German engineering industry — a major exporter to the United States — welcomed the Supreme Court ruling but said uncertainty remained.

“President Trump has several alternative legal bases at his disposal to impose global tariffs,” said Oliver Richtberg, head of foreign trade at the German Engineering Federation (VDMA). 

“We therefore fear that a 15 percent tariff on EU imports will be reintroduced soon.”

Camille Gijs reported from Brussels, Sophie Inge from London, Giorgio Leali from Paris, Zi-Ann Lum from Ottawa, Phelim Kine from Washington and Thorsten Mumme from Berlin.