For a brief moment on Thursday, it looked like the European Union and countries around the globe would get a surprise reprieve from the widest-sweeping tariffs imposed by US President Donald Trump.
The little-known US Court of International Trade in New York struck down the blanket baseline 10% tariffs on virtually all goods imported into the US, announced two months ago on what Trump dubbed “Liberation Day,” along with even higher country-specific rates.
The US federal court argued that Trump had overstepped his presidential powers with the radical and sprawling penalties, a central pillar of his isolationist “America First” economic policy, and ordered a halt to the tariffs.
But within hours, there was a fresh plot twist: an appeals court suspended that order too, essentially reinstating the tariffs for the time being.
How exactly the battle — which is essentially about how much power over trade policy resides with the president and how much with Congress — plays out within the US judicial system remains to be seen.
Back to negotiations
For the EU, along with other global trading partners, Thursday’s news boiled down to a welcome glimmer of hope that was quickly extinguished, at least for now.
In Brussels on Friday, the focus instead was on ongoing negotiations with the US. “Both sides are now working to an accelerated pace with a view to sealing agreements,” European Commission spokesperson Olof Gill told DW.
The EU executive branch represents the 27 EU countries, which together form the world’s largest trade bloc united under a closely integrated single market system, in commerce negotiations with the rest of the world.
European Commission Vice President Maros Sefcovic, whose portfolio covers trade, posted on social media platform X after a phone call with US Secretary of Commerce Howard Lutnick.
“Our time and effort [is] fully invested, as delivering forward-looking solutions remains a top EU priority,” Sefcovic wrote. “Staying in permanent contact,” he added.
As of April, most goods exports from the EU to the US are subject to 10% tariffs, with the bloc having so far avoided higher rates. This came on top of the painful 25% tariffs on steel and aluminum sold to the US, already imposed in March.
Stronger hand or just more confusion?
The EU was poised to hit back with significant countermeasures on everything from whiskey to motorcycles and prepared a second package, though both have been paused as EU-US negotiations continue.
Trump had threatened to hike the baseline rate to 50% in July. But last week, after a call with the US leader, European Commission President Ursula von der Leyen announced that both sides would hold fire for now pending further talks
Bernd Lange, the chair of the European Parliament’s trade committee, told DW he thought the Court of International Trade ruling could help Brussels. The baseline 10% tariffs hinge on a 1977 law, the International Emergency Economic Powers Act.
“This is really not a legitimate basis for tariffs against almost 100 countries around the world,” Lange said. “Republican states and companies close to them have also taken legal action against the president’s activities,” the German center-left parliamentarian noted.
“The position of the European Union is of course also strengthened because the potential for blackmail is reduced,” the EU lawmaker argued.
But Andre Sapir, an expert from the Brussels economic think tank Bruegel and former advisor to the European Commission, saw things differently.
“I think it brings even more uncertainty to the whole process,” Sapir told DW by phone. For the business community, one of the worst aspects of the ongoing trade war was the lack of clarity about how things would pan out, he explained.
What is the EU’s game plan?
The EU has offered a “zero-for-zero” tariff trade deal, in essence removing all penalties. This has so far not yielded a major breakthrough. One of Trump’s key complaints is that the US imports many more EU goods than the EU does from the US, also known as a trade deficit.
In December 2024, the EU exported €45.4 billion ($49.4 billion) worth of goods to the US, while it imported €27.5 billion worth of US goods. However, the EU frequently argues that the US sells far more services to the bloc than the other way round.
To assuage Trump, the European Commission has proposed pushing EU companies and countries to buy more natural gas from the US, a shift that is already well under way since it turned away from Russia over the full-scale invasion of Ukraine.
How is the strategy going?
Faced with threats from Trump, the EU has so far opted for a rather restrained approach compared to China, for example. Bejing has been much quicker and more aggressive in resorting to countermeasures, sending tariffs on both sides sky-high.
However, earlier this month, Washington and Beijing announced a truce in the escalation, each side cutting their tariff rate by 115%.
EU lawmaker Bernd Lange said that after the rulings, the basic strategy was unchanged. The bloc has made clear it is trying to address Trump’s concerns in the negotiations. “But it is also that if it doesn’t work, we will impose measures. The EU is strong enough.”
For Sapir of think tank Bruegel, Thursday’s rulings do not change much. Even if Trump’s “Liberation Day” tariffs were ultimately found to be based on shaky legal foundations and struck down, the president would likely simply find another way to impose different tariffs, he argued.
“I don’t think that any country can believe that this ruling is the end of that problem,” he said.
Edited by: J. Wingard
