On February 20, the US Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, invalidating the Trump Administration’s “emergency” duties.
The judgment — and the subsequent adoption of new tariffs under a different legal basis — has created ripple effects in Europe, where the Turnberry deal has been put on pause by the European Parliament.
Dura Lex
Little‑known individuals or companies sometimes trigger decisions that reshape entire legal orders.
In Europe, a single Italian consumer disputing a modest electricity bill from ENEL became the vehicle through which the Court of justice of the EU (CJEU) articulated the primacy of EU law over national legislation.
On the other side of the Atlantic, U.S. States and a handful of importers, including a wine company (V.O.S Selections) and family-owned educational toy company (Learning Resources), successfully challenged “Liberation Day” tariffs and curtailed the President’s discretion in trade policy.
The U.S. Administration had argued that IEEPA granted it authority to impose across-the-board tariffs during a declared national emergency to counter “unusual and extraordinary” foreign threats to U.S. national security or the economy.
Tariffs imposed by the Trump Administration were justified under IEEPA by the unusual and extraordinary threat to national security posed by the large trade deficits between the US and its partners (including the EU) for the “reciprocal tariffs” and by the public-health considerations related to imports of fentanyl for the “trafficking tariffs”.
With a 6-3 majority, the Supreme Court rejected the idea that the reference to “regulating importation” includes adopting tariff measures, which is not specifically referenced in the relevant provision. The Court held that under the so-called “major questions” doctrine, Congress cannot delegate its powers — which includes revenue-raising measures such as tariffs — to make major policy decisions without doing so unequivocally.
The effect is huge. The U.S. customs agencies stopped collecting tariff money on February 23, a few days after the Supreme Court’s ruling. The Court left unresolved if, and by what mechanism, the federal government should reimburse importers for the tariffs they have paid, which were projected in 2025 to exceed $200 billion.
New Tariffs
President Trump has responded to the decision by imposing a new 10% tariff (then raised to 15%) on all imports under the so-called Section 122. The 15% tariff will start applying on February 24 for up to 150 days on top of the most-favored-nation (MFN) rate.
The Administration has ample room to raise tariffs under other legal bases, including Section 232 (national security), Section 122 (for balance-of-payments issues), Section 301 (unfair trade practices). They might however prove trickier to put in place than IEEPA tariffs.
According to the Tax Foundation’s tariff tracker, before the IEEPA tariffs were struck down, the average effective U.S. tariff rate — measured as tariff revenue over total goods imports—jumped from 2.4% in 2024 to 7.7% in 2025, the highest level since 1947.
Over the same period, the weighted average applied tariff rate on U.S. imports surged from the World Bank’s 1.5% figure for 2022 to an estimated 13.8%, and is expected to remain at 12.1% while Section 122 tariffs are in force before falling to 6.7% once they expire.
And Now What?
The ruling has reduced one channel of tariff risk for EU exporters but immediately created a new layer of uncertainty around the future legal basis of U.S. duties and the stability of the 2025 EU–U.S. deal struck in Turnberry.
The new 15% tariff applies on top of the most-favored-nation (MFN) rate. It thus exceeds the 15% threshold agreed in Turnberry. In effect, the latest tariff regime announced by President Trump would increase the effective tariff rate for EU exports.
Implementation of the EU’s side of the Turnberry deal currently lies with the European Parliament, which has recently shown its desire to have its voice heard in trade matters (it referred the EU-Mercosur deal to the CJEU for a legal opinion).
The Parliament decided to postpone a vote planned on February 24 on the EU-U.S. trade deal. International trade committee chair Bernd Lang said the deal “should be put on hold until clarity, stability and legal certainty” are reestablished.
Bruegel’s Ignacio Garcia Bercero called for the EU response to be “firm without escalation”, which could include retaliatory tariffs in case the U.S. introduces Section 232 tariffs or using the Anti Coercion Instrument (ACI) if threats against the EU’s digital rules materialize.
*The opinions expressed in this article are those of the author alone and do not reflect the official position of any institutions or organizations with which he is affiliated.