On February 20, 2026, a sensational decision arrived: the United States Supreme Court declared most of the tariffs introduced by Trump illegitimate. In the judges’ sights were above all tariffs imposed by exploiting the IEEPA, a 1977 law designed to manage international economic emergencies. According to the Court, the term “regulate imports” in the IEEPA Act of 1977 does not authorize the president to impose tariffs. Among other things, the justices noted that in other federal laws the term “regulate” does not include the power to tax. Julian Marx, analyst at Flossbach von Storch, underlines this.
Necessity is the mother of ingenuity: the new US tariffs through Section 122 of 1974
The American government – explains the analyst – was not impressed by the sentence. Since the 1977 IEEPA law didn’t fit Trump’s tariff plans, his men simply went further back into the history books. The solution, at least temporary, was Section 122 of the Trade Act of 1974. This rule allows the US government to apply duties of up to 15% for a maximum period of 150 days. Thus, the current tariff regime seemed guaranteed until 24 July 2026.
But once again the question arises: are these new tariffs really legitimate? In a recent ruling dated May 7, the US International Trade Court declared them illegitimate. According to the judges, the “fundamental balance of payments problems” invoked by Trump had not been sufficiently demonstrated. Originally, Section 122 was designed to stabilize balance of payments problems. His logic reflected the era of fixed exchange rates. But when the United States switched to flexible exchange rates in 1973, the need for balance-of-payments tariffs largely disappeared.
Yet Section 122 remained there: a dormant, but still legally available, possibility to introduce temporary and generalized tariff surcharges without having to demonstrate unfair trade practices or threats to national security. It was Trump who was the first to use this rule to introduce large tariffs on imports. And it is likely to appeal the recent Commercial Court ruling.
The resulting tail of risks: billion-dollar risks for businesses and the public budget
In introducing new tariffs, the US administration undoubtedly displays a considerable amount of inventiveness. But these developments do not come without friction. On the contrary. Already at the beginning of March, more than 2,000 companies had sued, requesting the return of unduly collected IEEPA duties. According to estimates, between 130 and 175 billion dollars could return to American importers. Trump’s tariffs, therefore, do not only entail a huge (and unnecessary) administrative burden for businesses and government. In the twelve months between April 2025 – on April 2, Trump announced widespread tariffs for the first time – and March 2026, the American federal government collected approximately $330 billion in customs revenue. But about half of this sum could vanish retroactively. Compared to an annual public expenditure of over 7,000 billion dollars, revenue from tariffs therefore remains just a drop in the sea. Not exactly a good “deal,” when you consider the costs to American consumers and the resulting uncertainty.
The labyrinth of US tariffs on the EU, China and other trading partners
Also because, despite – or perhaps precisely because of – the many tariff announcements, it is increasingly difficult to maintain an overview. While the IEEPA tariffs have been declared illegitimate and replaced, at least temporarily, by the controversial Section 122 tariffs, many other customs rules exist at the same time. There are Section 232 tariffs, based on the Trade Expansion Act of 1962, which concern national security. They apply to various industrial products, such as steel, aluminum and automotive components. Also very well known are the duties of Section 301 of the Trade Act of 1974, designed to combat unfair commercial practices and aimed above all against Chinese goods. What at first glance may seem to have a certain logic, in daily practice often appears extremely chaotic. Because the exception becomes the rule, and the rule changes at short intervals, or at least its change is threatened. All this makes any planning very difficult.
New tariff threats against Europe and international partners
For example, in January Trump threatened some European countries with new tariffs as part of his Greenland annexation fantasies, even though a new trade deal with the European Union had been signed just the previous summer. Also this year, the American president threatened all of Iran’s trading partners with additional tariffs of 25%. And in early April the White House approved a new regulation on Section 232 tariffs on steel and aluminum. Under these new rules, manufactured products containing at least 15% metal are now subject to a uniform 25% duty. Products with a metal content of less than 15%, however, no longer fall under Section 232 duties. For Section 232 goods produced outside the United States but made with steel, aluminum or copper of American origin, a reduced duty of 10% applies instead. For industrial plants with a high metal intensity and equipment intended for electricity networks, a special duty of 15% is foreseen until 2027. And this is just a small excerpt of the tariff maze.
The practical difficulties for European exporting companies
It’s not just the speed with which tariffs change that creates problems for companies. Regarding Section 301 tariffs against China, for example, the commercial origin of the product matters, not the country from which it is shipped. As a result, goods of Chinese origin exported from the European Union may also continue to be subject to these duties. Therefore, great practical difficulties remain for exporting companies: high documentation obligations on the origin of the goods, problems in obtaining the so-called “mill test certificates”, which certify the origin of the metallic materials, and possible overlaps between different tariff instruments. Those who benefit from exceptions, at least for the moment, can consider themselves lucky: for example on certain electronic products, critical minerals or goods from the USMCA, the trade agreement between the United States, Canada and Mexico. How long-lasting these exceptions are, however, is difficult to predict.
US escalates trade conflicts with Canada, EU and global partners
Canada is once again at loggerheads with the United States. Washington has in fact launched extensive Section 301 investigations for unfair competition against numerous countries. In other words, after the lifting of the IEEPA tariffs, the United States is already actively seeking new legal avenues, before the temporary Section 122 tariffs expire in July at the latest. And so the script repeats itself. Donald Trump’s new tariff regime becomes, month after month, more and more “timeless”. The market now seems to have become accustomed to a lack of predictability in the trade of goods with the United States. The average duration of Trump’s tariff decisions – or even just his threats – is often a few months, if not less.
Even an abbreviated overview is enough to show the chaos created by the American president. But every day that Trump believes he is making customs policy in the name of “justice,” he increasingly transforms the US Customs and Border Protection agency into one of the greatest bureaucratic monsters of our time. One thing, with a smile, can be granted to Trump: given his German roots, a certain inclination towards bureaucracy is perhaps not entirely surprising.
