EU Considers Retaliation Against New US Tariffs After Court Ruling

Following the US Supreme Court ruling that invalidated President Donald Trump's sweeping global tariffs based on the International Emergency Economic Powers Act (IEEPA), France stated the EU possesses the "appropriate instruments at its disposal" to retaliate. Trump subsequently announced a new flat global tariff of 10%, later escalating it to 15%.

Key points

• The EU may deploy measures like the "trade bazooka" (Anti-Coercion Instrument or ACI) against US technology companies.
• A suspended package of retaliatory tariffs potentially targeting $106 billion of US goods could be deployed.
• The UK hopes its negotiated preferential arrangements on steel, cars, and pharmaceuticals will be unaffected by the new 15% global rate.
• The Supreme Court ruled six-three that IEEPA does not authorize the President to impose tariffs, marking a major defeat for Trump's economic policy.
• The US administration is also threatening to pressure the UK for concessions on issues like chlorinated chicken and pharmaceutical costs.

Why it matters

The US Supreme Court's decision dismantled the legal basis for Trump's sweeping tariffs, but the President immediately sought alternative authorities, leading to new tariffs that could negatively impact international trade partners like the EU and UK.