Supreme Court Ruling Triggers New Tariff Framework
The Supreme Court of the United States ruled that several broad tariffs imposed by President Donald Trump were unlawful under the legal authority previously used. In response, the administration announced a new 15% tariff on imports, invoking powers under the 1974 Trade Act, a separate statutory mechanism.
According to US Trade Representative Jamieson Greer, this new tariff does not invalidate agreements negotiated over the past nine months with approximately 20 trading partners, including the UK, EU, Japan and Switzerland.
“We’re going to stand by them. We expect our partners to stand by them,” Greer said in a televised interview.
This distinction is critical for global markets seeking stability amid legal uncertainty.
UK–US Trade Relations: Will Preferential Terms Hold?
The UK government has acknowledged business uncertainty but signaled confidence that existing arrangements will remain.
Bridget Phillipson described the situation as “evolving” while reiterating that the UK expects preferential trade arrangements to continue.
The broader framework stems from the Economic Prosperity Deal (EPD) announced between President Trump and UK Prime Minister Keir Starmer. While it maintained a 10% baseline tariff, it included important sectoral carve-outs:
- 0% tariff retention for UK pharmaceuticals
- Discussions on reducing 25% steel tariffs
- 10% tariff on UK car exports (lower than some other countries)
Trade policy experts suggest the UK may now push to convert political agreements into binding legal text to reduce exposure to future policy shifts.
EU Response: “A Deal Is a Deal”
The European Union has also reaffirmed its commitment to the agreement negotiated between Ursula von der Leyen and President Trump in Scotland last July.
That arrangement set a 15% import tariff on most EU goods, half the rate previously threatened. However, EU officials are concerned that layering the new 15% levy on top of existing tariffs could increase effective rates on products such as wine and spirits.
Maroš Šefčovič has held discussions with US officials to clarify the scope of the new measure.
Meanwhile, Bernd Lange, chair of the European Parliament’s international trade committee, described the situation as “tariff chaos,” suggesting that a scheduled parliamentary vote on the US agreement may be postponed.
Legal Constraints: The 150-Day Limit
Under the 1974 Trade Act, the new 15% tariff can remain in effect for 150 days unless Congress authorizes an extension. This introduces a new variable:
- Congress now becomes a decisive player in trade policy.
- Business groups may intensify lobbying efforts.
- Legal durability of the tariff remains uncertain beyond late August.
This marks a structural shift from prior tariff rounds, where executive authority operated with fewer legislative constraints.
Business and Market Impact
Industry leaders across the UK and EU emphasize three main concerns:
- Policy unpredictability affecting long-term contracts.
- Risk of cumulative tariff stacking on sensitive sectors.
- Need for legally binding frameworks rather than political declarations.
Trade analysts note that governments are recalibrating strategies given the evolving US legal environment. The broader message from global partners: stability and clarity are essential for supply chains and investment flows.