European officials had envisioned 2026 as a year of renewed calm after a tumultuous period of trans-Atlantic relations. However, despite many in Europe welcoming a U.S. Supreme Court ruling that overturned President Trump’s sweeping tariffs, the decision has paradoxically ushered in a new era of trade uncertainty, just as leaders were eager to tackle other critical global issues.
This rekindled turmoil risks consuming valuable geopolitical attention, precisely when European nations intended to prioritize the ongoing situation in Ukraine and strengthen their defenses against what they perceive as unfair trade practices from China.
The Supreme Court announced its decision on Friday, asserting that the president had overstepped his authority by imposing extensive tariffs on imports from nearly all U.S. trading partners, including a 15 percent levy on goods from the European Union.
Many trade experts suggest that this ruling may not ultimately dismantle a significant trade agreement forged last year between the 27-nation European Union and Mr. Trump. This is largely because the Trump administration has indicated its possession of alternative mechanisms to maintain elevated tariffs. Indeed, Mr. Trump has already enacted a 10 percent across-the-board tariff under a temporary authority and has hinted at utilizing other avenues to impose even higher tariffs.
However, the court’s decision introduces significant unresolved questions: Will the tariffs already collected be reimbursed? The Supreme Court offered no guidance on this matter. More urgently, how precisely will the Trump administration implement new tariffs to replace the recently invalidated ones in the long run?
These lingering uncertainties are poised to absorb the attention of leaders and officials across both sides of the Atlantic for several months. European leaders, in particular, are closely monitoring Mr. Trump’s reaction.
“His back is against the wall — what do you think he’s going to do? There is uncertainty,” noted Neil Dutta, head of economics at Renaissance Macro Research. “Europe is definitely going to be affected by that.”
For the moment, European leaders have largely welcomed the Supreme Court’s decision, though they have offered little detail on their precise next steps.
“We remain in close contact with the U.S. administration as we seek clarity on the steps they intend to take in response to this ruling,” stated Olof Gill, a spokesperson for the European Commission, the executive body of the European Union, following the announcement.
Brando Benifei, who chairs the European Parliament’s delegation for relations with the United States, lauded the decision as “a signal of hope and vitality in the system of checks and balances.”
Nevertheless, the Supreme Court’s ruling casts the future of the E.U.-U.S. trade deal into doubt. Ursula von der Leyen, the president of the European Commission, negotiated an agreement with Mr. Trump last year to establish 15 percent tariffs on various European goods, and this package is still awaiting final approval from the European Parliament.
The ratification process has already encountered delays, with lawmakers pausing consideration of the package amidst recent tensions concerning Greenland, which Mr. Trump has expressed interest in acquiring. The new question is whether members of the European Parliament will opt for yet another postponement.
Despite the invalidation of the original rationale behind the 15 percent tariffs, compelling reasons exist to proceed with the deal. Firstly, the United States has clearly demonstrated its resolve to impose higher tariffs through alternative means. Secondly, many European businesses crave the predictability and stability that a definitive agreement would provide.
“No one in Europe should get overly confident,” advised Jörn Fleck, senior director at the Europe Center at the Atlantic Council, a prominent research organization. “The administration’s goals haven’t changed, and U.S. officials before the ruling explicitly stated their intention to find new methods to re-establish these tariffs.”
Still, several European legislators indicated on Friday that they would require further analysis following the court’s decision.
Bernd Lange, who leads the European Parliament committee responsible for finalizing the trade agreement, announced on a social media platform that he had “convened an extraordinary meeting” for Monday to evaluate the implications of the Supreme Court’s decision for the deal.
Should the ruling lead to the collapse or significant delay of the trade agreement, it would thrust Europe and the United States into a fresh period of intense economic unpredictability. Even if the deal proceeds, the coming months are likely to be politically charged.
Mr. Trump and his administration will likely be preoccupied with finding ways to reinstate tariffs. The strategies they adopt will probably involve leveraging existing trade policy instruments, such as national security inquiries and investigations into unfair trading practices.
For instance, the United States might argue that Europe’s digital regulations — which it has historically opposed — effectively constitute a tax on American businesses.
Such developments could escalate tensions between the United States and Europe.
“In the very near term, there is going to be a degree of uncertainty,” observed Jacob Funk Kirkegaard, a senior fellow at the Bruegel research organization. He added that, in the long run, this might lead to greater stability by limiting the Trump administration’s overall discretion over trade policy.
For the time being, without clear information on how the Trump administration intends to maintain tariffs, European businesses may find it challenging to formulate future plans.
“European business wants stability and predictability in the trans-Atlantic relationship,” stated BusinessEurope, a Brussels-based trade association, in a post-decision statement.
European policymakers might also face hurdles in urging their American counterparts to concentrate on other shared priorities.
The war in Ukraine remains at the top of that list. American officials recently met with Ukrainian and Russian representatives in Geneva in an effort to mediate a peace agreement, but progress has been slow. European officials have diligently worked over the past year to keep the Trump administration engaged in supporting Kyiv, as the fourth anniversary of Russia’s full-scale invasion draws near.
China presents another area of mutual concern that risks being overshadowed by the prevailing trade disputes. Both the United States and European nations share an interest in establishing a secure supply of vital raw materials, including rare earth minerals, to reduce dependence on the Asian superpower.
However, Mr. Fleck of the Atlantic Council suggested that while this new layer of uncertainty does not “make things easier,” European leaders have demonstrated their ability over the past year to advance other priorities even when trade issues dominate the international agenda.
The European Union “seems to have learned to adapt and compartmentalize,” he concluded.