Uncertainty Is Worse Than Tariffs

Hello! Today is February 24, 2026, and here is your EU news summary for the week. Feel free to share this newsletter with friends and colleagues, and follow us on LinkedIn.

Expert of the week: Thomas Harbor is a Brussels-based lawyer. He is an adjunct lecturer in economic policy at Sciences Po in Paris and the cofounder of What’s up EU.

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.

BOARD OF PEACE • The participation of European Commissioner for the Mediterranean Dubravka Suica in the first meeting of the Board of Peace in Washington is causing waves. She attended the meeting as an “observer”, even as the Commission says it is questioning whether the Board is compatible with the UN Charter.

France, Germany and Spain refused from the outset to take part. Hungary, Italy, Slovakia and the Czech Republic chose to send representatives, sometimes at the cost of strong domestic criticism. Other countries are opting for minimal participation so as not to upset Washington while still signalling their reservations.

The French foreign minister considers that the Commission has no mandate from the Council to engage in this format. The Quai d’Orsay is making any possible French involvement conditional on a clear refocusing of the Board on Gaza, strictly within the framework of a UN Security Council resolution.

Discussions among EU member states are expected to focus on oversight of the Commission’s external mandates and on the common line to take towards the Board of Peace.

DSA • The Irish Data Protection Commission has opened an investigation into non‑consensual sexual images generated by the Grok chatbot, a product of X. The US company is already at the centre of a separate case opened by the Commission under the Digital Services Act (DSA) over the dissemination of sexualised images.

In addition, X is challenging in court the 120‑million‑euro fine imposed by the Commission in December for failures on transparency and for deceptive design of its “blue checkmarks”. This is the first DSA sanction and the first legal appeal against such a fine, with X denouncing a “superficial” investigation and “serious procedural errors”.

The Commission has also opened an investigation against Shein for selling illegal products, including child sex dolls, for the “addictive” design of its platform, and for the opacity of its recommendation systems, under the DSA.

FCAS • Intended to replace the Rafale and Eurofighter around 2040, the French‑German‑Spanish Future Combat Air System (FCAS) project is more fragile than ever due to open divergences between Paris and Berlin.

Industrial disagreements between Dassault Aviation and Airbus are now compounded by an explicit strategic rift between Emmanuel Macron, who argues for a single European fighter model, and Chancellor Friedrich Merz, who favours two different aircraft tailored to national needs.

In detail, the German chancellor insists this is not a political quarrel but a real problem in the requirements profile, as Germany is not seeking either nuclear capability or aircraft‑carrier operations, unlike France. He raises the possibility of alternative cooperation formats, or even other European partners, while denying any rupture with Paris.

For his part, the French president reiterates the need to standardise European air capabilities and to “redouble our determination” in a context of heightened competition and threats to European sovereignty.

HUNGARY • Hungary has vetoed the 90 billion euro loan to Ukraine, even though it was already politically approved on 18 December. Yet Hungary, Slovakia and the Czech Republic had secured an opt‑out from the scheme.

Viktor Orbán — campaigning for re‑election in April — has reaffirmed his opposition to the transfer of funds, accusing Ukraine of deliberately dragging its feet on repairs to the Druzhba pipeline, which was damaged in a Russian drone attack.

Budapest is simultaneously threatening to block the EU’s 20th sanctions package, which includes a ban on maritime services for ships transporting Russian oil, tighter measures against circumvention via third countries, and a prohibition on crypto transactions with Russia.

• In Intereconomics, Adam Posen argues that with the US retreating from its global stabilizing role, Europe can shape international trade by leveraging its openness and targeted industrial policy, rather than copying the interventionist, coercive strategies of Washington and Beijing.
• In a brief for the CER, Anton Spisak observes that while the EU has negotiated an ambitious free-trade agreement with Mercosur, the domestic political resistance to ratification exposes a weakness in Europe’s geoeconomic strategy: it can conclude deals but struggles to build the internal consensus needed to deliver them.