The European Parliament has hit the pause button on ratifying a major trade deal with the United States, injecting fresh uncertainty into transatlantic relations.
This sudden freeze is a direct reaction to a dramatic legal and political shift in Washington. The core of the issue lies in a recent U.S. Supreme Court decision that struck down the legal authority President Trump had been using for his global tariff program. In response, the White House quickly pivoted to a different, older law—Section 122 of the Trade Act of 1974—to announce a new global tariff surcharge of up to 15%.
This pivot created a chain reaction. First, the Supreme Court's ruling effectively erased the legal foundation of the previous tariff regime, creating a vacuum. Second, the White House's move to invoke Section 122 filled that vacuum with a new, uncertain policy. This new law allows for a temporary surcharge but raised immediate questions in Brussels: would this new tariff override the carefully negotiated terms of the EU-US “Turnberry” trade deal? Third, faced with this ambiguity, the European Parliament chose caution and froze the ratification process, demanding legal clarity before moving forward.
This isn't the first time the Parliament has used this tactic. A similar freeze occurred in January during the “Greenland crisis,” setting a precedent that geopolitical or legal shocks could halt trade progress. The stakes are incredibly high. In 2024, EU goods exports to the US were worth over €530 billion. A potential 15% tariff could impose an annual cost of nearly €56 billion on key European industries like pharmaceuticals, automobiles, and machinery.
Ultimately, what was once a matter of finalizing implementation details for a trade agreement has now transformed into a complex exercise in managing legal and political risk. The Parliament’s message is clear: we will not proceed until we know exactly what rules we are playing by.
- Section 122 of the Trade Act of 1974: A U.S. law that grants the President authority to impose a temporary import surcharge (up to 15% for up to 150 days) to address a balance-of-payments deficit, without needing new legislation from Congress.
- Anti-Coercion Instrument (ACI): An EU regulation that allows the EU to apply countermeasures, such as tariffs or trade restrictions, against a foreign country that is trying to pressure the EU or a member state into making a particular choice.
- IEEPA (International Emergency Economic Powers Act): A U.S. federal law authorizing the President to regulate international commerce after declaring a national emergency in response to an unusual and extraordinary threat.