US tariff chaos complicates negotiations with China and the EU

No one knows what will happen with the US tariffs . Not even President Donald Trump , whose team is working against the clock to try to contain the credibility crisis unleashed by the ruling of the International Trade Court, giving him negotiating power at a key moment in talks with two of his toughest rivals: China and the European Union .

On Thursday, the US court responsible for mediating trade disputes, based in New York but with jurisdiction nationwide, declared all the tariffs imposed by Trump since February illegal , except for those affecting the auto and steel industries. The White House appealed the decision to the Court of Appeals, which agreed to consider the appeal and, as a precaution, temporarily overturned the Trade Court's ruling a few hours after the ruling was announced.

This is a precautionary measure and, moreover, falls within the usual procedure. Trump has no guarantee that his appeal will succeed, even though he believes that repealing the tariffs "is destroying presidential power." Furthermore, the deadline for the parties to submit their arguments to the Court of Appeals is June 9. The plaintiffs, of which there are two, will do so first.

On one side is a group of small U.S. importers, represented by the Liberty Justice Center . On the other side is a coalition of state governments, mostly Democratic, who are trying to challenge Trump's policies through legal means, given the impossibility of challenging them in the U.S. Congress. Afterward, it will be the Department of Justice's turn to present its brief responding to the plaintiffs' arguments.

From there, the timeline or the judges' plans to review the case in depth are unknown. If this option fails, the White House would have no choice but to appeal to the Supreme Court , which is controlled mostly by conservative justices, several of whom were nominated by the US president himself during his previous term. In fact, in recent days, Trump has scored significant victories thanks to this body in other policy areas, although in all cases these are temporary decisions pending reasoned and final rulings.

And yet, there are doubts that Trump's tariff case will succeed in time to get the trade negotiations underway, which are expected to conclude by mid-July at the latest. There's less than a month and a half left, and Washington doesn't even have the approval of judges to impose its own rules.

The trade war continues

However, neither the White House has run out of options , nor does the president intend to abandon his trade war and emerge victorious. For now, he has bought time thanks to the injunctions from the Court of Appeals. That was the most urgent matter. Now, and faced with the unpredictability of what may happen until the case reaches the Supreme Court (which would be the next step), his lawyers and trade advisors are already designing a strategy to resort to other legislation that will allow him to push through the tariffs and continue to circumvent the US Congress.

That's precisely where the problem lies. If anything, Trump wanted to avoid at all costs the delay of his trade war in endless debates and negotiating sessions on Capitol Hill. Although his party controls both chambers, the truth is that there is still considerable internal tension , and any legislative proposal could drag on.

The White House then opted to resort to a series of special and extraordinary powers that US law grants the president in urgent situations where national security is at risk. For Trump and his team, the trade deficit justifies this decision . Not so for the Court of Trade. It remains to be seen what the Court of Appeals, and likely the Supreme Court, will think.

But if this path ends in a dead end for Trump, his team is already working on a plan B , which is none other than resorting to the fine print of the law. In this case, to a 1974 law, which in the event of a trade deficit allows the president to impose an emergency tariff of up to 15% for 150 days. If he ultimately had to resort to this mechanism, it would completely change the landscape of the current negotiations, inevitably delaying them until after the summer.

For now, to make it clear that he's only lost a battle but not the war, Trump opened fire on China yesterday . After restricting exports of chips and AI technology to the Asian giant and instructing the revocation of visas for Chinese students, he accused Beijing of flouting the initial agreement that serves as the basis for ongoing negotiations to reach a trade truce.

" China, perhaps unsurprisingly to some, has completely violated its agreement with us . That's what I get for being a good guy!" he said in a social media post. "I quickly reached an agreement with China to save them from what I thought was going to be a very bad situation for them, and I didn't want that to happen. Thanks to that, everything quickly stabilized and China returned to normal."

The president did not specify how China may have violated the agreement . As part of the pact, China said it would reduce its tariffs on U.S. goods from 125% to 10% (the U.S. would also cut them to 30%) and would cancel or suspend some non-tariff retaliatory measures, which could include easing export restrictions on critical minerals used in batteries and other high-tech applications.

Treasury Secretary Scott Bessent acknowledged on Friday that talks with Beijing are "pretty much at a standstill." White House sources speak of a stalemate. Neither the court ruling nor Trump's constant threats of new restrictions on China are helping matters. Furthermore, the WHO has yet to issue a ruling on the complaint filed by Beijing, among other countries, arguing that US tariffs violate international trade agreements.

As for Europe, talks are progressing slowly . Yesterday, European Trade Commissioner Maros Sefcovic spoke by telephone with his American counterpart, Howard Lutnick . There was little news in such an uncertain context, beyond an emphasis on the two sides' commitment to maintaining "permanent contact" to seek a "future solution."

To this day, the White House is still sticking to the July 9 date Trump agreed to last weekend with European Commission President Ursula von der Leyen . From then on, if there is no agreement, a global tariff of 50% would supposedly go into effect for all member countries, something that, given the latest court ruling, seems highly unlikely, both given the tax rate and the date.

For its part, Beijing continues to reach out to Brussels . On Friday, it expressed its willingness to lift some of the limits affecting rare earth exports to the European Union.