European companies and business associations fear this Customs ruling in the USA increased uncertainties in international trade. “New tariffs on a different legal basis are possible at any time. The trade policy turbulences do not disappear – they just change the playing field,” said VCI Managing Director Wolfgang Große Entrup after the Supreme Court’s decision.
Reason for the all-clear after the decision of the Supreme Court he doesn’t see. “For our companies this is not the beginning of a phase of stability, but rather a new round of uncertainty.” Anyone who thinks that the ruling will settle the customs conflict is mistaken. The VCI represents companies such as BASF, Bayer and Evonik.
On Friday, the Supreme Court declared a large part of the tariffs imposed by US President Donald Trump to be unlawful. By a majority of six to three, the justices upheld a lower court’s ruling that the US president had exceeded his authority by applying a law intended for national emergencies.
Just hours after the verdict, the VCI boss’s fears came true: Trump announced new tariffs on a different legal basis. The US President said he would impose a global tariff of ten percent for 150 days in addition to existing tariffs.
“All this creates great instability”
Regardless of the tariffs that have now been overturned by the judge, they levy USA
other taxes, such as tariffs of 50 percent on steel with reference to national security.
The German mechanical engineering association VDMA was also skeptical after the court decision: the practical effects of the decision cannot yet be foreseen, said Oliver Richtberg, head of the association’s foreign trade department. “This contributes to the ongoing uncertainty of our companies.”
The reactions in other EU countries are similar. The secretary general of the Italian wine association UIV, Paolo Castelletti, said: “This decision risks a boomerang effect, leading to further uncertainty and a postponement of orders while traders wait for a clearer legal framework.” For the Italian wine industry, the USA is the most important market with exports worth around 1.9 billion euros in 2024.
For Massimiliano Giansanti, president of the Italian farmers’ association Confagricoltura, the verdict comes at an inopportune time. It complicates the situation for exporters at the very moment they began to adapt to US tariffs. “All of this creates great instability at a time when we need security.”
The French cosmetics association FEBEA, of which L’Oreal is a member, said it was closely monitoring the US government’s reaction. “We are used to the twists and turns on this issue,” said Secretary General Emmanuel Guichard. Eoin Ó Catháin, director of the Irish Whiskey Association, was sobering: “This is not a panacea to get rid of tariffs,” he said. “It’s just another complication, another twist in the story.”
