EU mulls next step in face of tariff war

BRUSSELS — European Union officials said Monday that they were pausing work toward implementing their trade deal with the United States as they try to understand what President Donald Trump will do after a pivotal Supreme Court ruling.
Last week, the Supreme Court struck down Trump’s sweeping tariffs, which he had used to reset trading relationships around the world — including with the European Union, which had negotiated for a 15% rate in a deal last year.
Trump moved rapidly over the weekend to replace those levies. But he has now applied a 15% tariff on nations around the world, using a different authority from the one ruled on by the Supreme Court, which stacks on top of existing tariffs. For many producers in Europe, that means the actual tariff they face will be higher than under the deal.
A “whole range of products … are now much higher than the 15% in the old agreement,” Bernd Lange, a German member of European Parliament and chair of its international trade committee, said Monday.
Lange’s committee was meant to vote on the trade deal with the United States on Tuesday, but decided to put that on hold until there was greater clarity.
He pointed to products such as European cheese: U.S. importers already paid 15% tariffs on Parmesan and Camembert cheese before last year’s trade deal. Under the trade deal, cheese was capped at 15%. But now, the existing rate will be added to the new 15% levy, making for a tariff of nearly 30%. Plus, Lange pointed out, it is not clear what Trump’s administration will do next. The tool Trump is now using to keep tariffs at 15% only lasts 150 days, after which Congress would need to approve an extension.
“This is so uncertain,” Lange said. “It’s unclear if there will be additional measures.”
EU officials have been clear that they would like to stick by their trade deal. Maros Sefcovic, the EU’s trade commissioner, wrote on social media that “full respect” for the trade agreement is “paramount.”
Ursula von der Leyen, the president of the EU’s executive arm, made the rough agreement with Trump last year during a meeting at his golf course in Turnberry, Scotland.
The package has been unpopular in Europe. From the start, it was widely seen as an unbalanced agreement that favored the United States.
But many policymakers have concluded that it was probably the best deal they could have achieved. The agreement capped tariffs on most products at 15%, while Europe managed to hold firm on key red lines, including leaving its digital services regulations unchanged.
The problem now is that the situation has changed, and the Trump administration has suggested that more adjustments could come.
Administration officials have suggested that they could use other powers, including investigations based on national security over digital regulations or other issues, to maintain high tariffs.
Trump, for his part, warned American trading partners not to “play games” in response to the Supreme Court decision, writing in a post on Truth Social on Monday.
He said nations that do “will be met with a much higher Tariff, and worse, than that which they just recently agreed to.”
‘ECONOMIC WAR’
The leader of Canada’s most populous province said Monday that “the walls are closing in” on Trump after the Supreme Court struck down many of Trump’s tariffs and said he’s also looking forward to the U.S. midterm elections in November, which could further constrain Trump.
Ontario Premier Doug Ford said Canada is in an “economic war” right now and said no deal is better than a bad deal with Trump.
“It’s very challenging right now. I just sit back some days, and I am not the only one. Everyone in the world sits back. How can one person, one man, create so much turmoil around the world? Not just here in Canada but around the world. It is pretty staggering. So I can’t wait for the midterms,” Ford said.
“It was a positive message from the Supreme Court,” Ford added in regard to the decision Friday.
Most of Canada’s exports to the U.S. are covered by the United States-Mexico-Canada trade pact, but some tariffs are taking a toll on certain sectors of Canada’s economy, particularly aluminum, steel, autos and lumber.
Ford warned that Trump could scrap the free trade deal that is under review this year.
Ford said other countries like Japan and the U.K. “rushed in to get a deal and all of a sudden, he turned on them like a rattlesnake. We’re going to be cautious.”
Ford noted that many Republican seats will be up for grabs in November’s elections for control of the House and the Senate, including a number of them next door in Michigan.
“The walls are closing in on President Trump,” Ford said. “You saw him lose the vote and six Republicans crossed the floor with Congress and then you saw the Supreme Court.”
TRADE DEALS IN DOUBT
After the Supreme Court struck down the legal basis for President Donald Trump’s sweeping tariffs Friday, many U.S. trading partners saw the tariff rate on their goods lowered from what they faced before the ruling. But for others, like Britain and Australia, the math went the other way.
Like the earlier “reciprocal” tariffs that were invalidated by the court, the new import duties upend years of economic cooperation. In some cases, the new tariffs thrust into doubt trade deals agreed to only months ago.
Britain became the first country to reach a trade deal during Trump’s second term, and both governments emphasized the “special relationship” between the two countries. As part of the deal reached in May, Britain secured a 10% tariff rate, which was applied on top of existing levies. Britain also secured some lower sectoral tariffs, which rely on a U.S. legal authority not subject to the Supreme Court ruling, on its exports of cars and plane parts, in exchange for accepting higher imports of American beef and ethanol.
After Trump said Saturday that he would raise an across-the-board tariff to 15%, putting Britain in a worse situation, government leaders in London sounded less certain about their country’s special status. Bridget Phillipson, the education secretary, said on Sky News on Sunday that Britain had secured a “preferential deal” and that “we would hope and expect that to continue, but these discussions are ongoing.”
The higher global tariff rate makes Britain the biggest loser among America’s top 20 import countries, with Japan, South Korea and major European Union members also worse off, according to Global Trade Alert, a nonprofit policy tracker. Brazil, China and India stand to benefit the most.
Most of Britain’s trade with the United States is in services, but last year it exported about $81 billion of goods to the United States from about 40,000 companies.
For Australia, a free-trade agreement signed in 2005 eliminated virtually all trade barriers between it and the United States. Trump’s initial batch of tariffs last spring imposed a baseline 10% rate on Australia and many other countries. That means Australia is also now subject to higher rates than before the court ruling for most of its exports.
Prime Minister Anthony Albanese of Australia called the new levies unfair at a news conference Monday. “We will of course make appropriate representations,” he said. “We support free and fair trade.”
The White House did not respond to a request for comment.
Information for this article was contributed by Jeanna Smialek, Eshe Nelson and Aaron Krolik of The New York Times and by Rob Gillies of The Associated Press.
