Trump backs down from threats of tariffs on European cars
US President Donald Trump has once again changed his stance on trade tariffs. He planned to raise the rate on car imports from Europe from 15% to 25% as early as this week, but at the last moment decided to postpone this decision.
On Friday, Trump stated he would increase tariffs on cars and trucks from the European Union, citing the EU’s failure to meet the terms of the trade agreement. However, now that the time for action arrived, he has changed course.
In a social media post, Trump said he had a “great conversation” with European Commission President Ursula von der Leyen. They agreed to postpone the introduction of tariffs until July 4. The President threatened that if the EU does not meet the terms of the agreement by the US’ 250th anniversary, the tariffs “will immediately rise to significantly higher levels.”
Trump did not specify how high the new rates could be or whether they would apply to goods other than cars. Earlier reports indicated that the EU could finalize negotiations on the agreement as early as June.
The President of the European Commission noted: “Good progress has been made towards reducing tariffs by the start of July. We remain fully committed to the implementation of the agreement on both sides [the US and the EU].”
Court delivers new blow to Trump’s tariffs
Meanwhile, the US Court of International Trade issued a ruling that found the Trump administration’s new 10 percent global tariff unlawful. As explained by the Liberty Justice Center, the court established that Section 122 of the Trade Act of 1974 “does not authorize the president to impose these tariffs under the current economic conditions.”
The court’s ruling stated: “Section 122 is a narrow, time-limited tool designed to address specific balance-of-payments crises, not a blank check for the executive branch to impose global trade restrictions in response to ordinary trade deficits or to circumvent prior court rulings.”
This ruling follows a high-profile Supreme Court decision that struck down tariffs imposed through the International Emergency Economic Powers Act. In response, the government introduced a 10 percent tariff based on Section 122, which led to a lawsuit from the Liberty Justice Center on behalf of the companies Burlap & Barrel and Basic Fun!
Politico reported that the court “barred the administration from collecting the duties from the state of Washington and the two companies that filed the lawsuit.” However, the court did not “issue a nationwide exemption for the hundreds of thousands of importers who have paid or continue to pay these tariffs.”
The court concluded that only the state of Washington and the two companies had standing to sue. However, this ruling likely paves the way for new lawsuits.
This situation demonstrates that US trade policy remains unstable. Constant changes in tariff rates create uncertainty for businesses on both sides of the Atlantic. Court rulings limiting the president’s authority in this area could lead to prolonged legal battles. Meanwhile, negotiations between the US and the EU continue, and the July deadline will be a key moment for determining the future of trade relations.