Name: European leaders coordinate response to Trump's new tariff escalation | DW News
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European leaders are planning a coordinated response to Donald Trump's latest action on trade tariffs.

The president is planning a new worldwide 15% levy in response to the U.S.

supreme Court striking down most of his previous tariffs.

Germany's Chancellor, Friedrich Metz, has warned that constant uncertainty about tariffs is harmful for both European and US Economies.

Kimberly Clausing, professor of tax law and policy, UCLA School of Law, joins us now from Los Angeles.

Kimberly, almost in a blink of an eye, we had a Supreme Court ruling against tariffs, then tariffs imposed again, first at 10%, then at 15.

What impact will this have on the American economy?

Well, the one piece of good news here is for the institutional strength, it's good that the Supreme Court ruled in a way that's consistent with the law and with separation of powers.

The president doesn't have the authority that he had been pretending he had in levying all of these mercurial tariffs.

And so now the president will be turning to these other authorities.

For the economy, though, while this is all being sorted out, whether these new tariffs are even permanent or not, we're still left with a lot of chaos and uncertainty.

For consumers, prices are still going to be high.

The new levels of tariffs look very similar to what they were prior to the ruling.

So there's going to be very little change in the consumer pain.

If anything, businesses might be more likely to pass through these costs to consumers.

The longer this lasts for businesses, there's uncertainty, higher costs and reductions in manufacturing employment in response to that.

So this has been tough for the business community, too.

This obviously affects markets all over the world, but what do you imagine the European reaction should be?

Well, one good piece of news for all the US Trading partners is the predictability of US Tariff policy should be somewhat better under the new authorities than they were under the prior authority.

Under the prior authority, the president was free to change the tariff at the drop of a hat on any country and would often threaten to do so through social media posts.

And so there was constant fluctuation and unevenness across the trading partners.

Now, this authority requires, across the board, 15% maximum rate.

And trading partners can be assured that it's similar to what it is for other countries.

So in five months, this will be gone unless the Congress passes an act to extend them.

And it's very unlikely that Congress will do that because they've already expressed disapproval of these tariffs on multiple occasions.

What would actually happen if companies demanded a refund for tariffs that had been unlawfully imposed in recent months.

So these refunds are absolutely sensible response to these unlawful tariffs.

And hopefully the lower courts will start, you know, issuing rulings indicating that these refunds should happen.

Each year, the IRS refunds excess tax taxes paid to millions and millions of U.S. households.

it may be held up in litigation if the administration is intransigent and tries to delay or postpone these refunds.

That's Kimberly Claussing, a professor of tax law and policy, UCLA School of Law.

Really appreciate your time and your perspective.

Abigail hall, associate professor in economics at the University of Tampa, joins us now for more.

Abigail hall, Almost in a blink of an eye, we had a Supreme Court ruling against tariffs, then tariffs again, first at 10%, then at 15.

So all we can really say at this point is here we go again.

So I anticipate that we're going to continue to see a lot of uncertainty which has really plagued businesses both large and small throughout the US Economy over the last year.

Now, whether or not these tariffs will stand up to legal challenges, which are inevitably coming.

Given the Supreme Court ruling that we got yesterday, that seems really unlikely.

You're across the Atlantic, but with a vision towards the other side.

What should the European reaction look like?

So it's difficult to say as an economist what people should or shouldn't do.

It wouldn't surprise me at all if, as the chancellor mentioned, there is not a coordinated European response.

Because really, in the face of these tariffs again now repeated over and over for the last year, there's really kind of two options.

One is to kind of acquiesce to the demands of the US President.

The other is to kind of push back in terms of implementing their own economic pain.

Keeping in mind, however, that just as tariffs imposed by the US Are detrimental to our trading partners as well as ourselves, any kind of counter response is similar, and

that it's not just harmful to the US but also harmful to the nations who impose them.

Will Trump's latest tariffs remain in place, or will they be overturned by a court?

Again, given the Supreme Court ruling yesterday, which was very clear that the president does not have widespread authority to issue tariffs, it seems very unlikely that this most recent round will hold.

Specifically, the legislation that the administration is saying allows them to impose this latest round of tariffs has to do with something called the balance of payments.

And this type of tariff that he's proposing is only allowable in a balance of payments crisis.

But based on current exchange rates, our balance of payments is zero.

So it seems very difficult to see how this would hold legal water.

I suspect as an economist recently, you've probably been looking at the whole issue of tariffs much more closely than you ever looked in the past.

Looking at the evidence from the first and now second Trump administrations, have tariffs actually delivered on their promises for American workers?

Or are we risking a long trade war that leaves both the US and its partners worse off?

If we're using the yardstick laid out by the administration for what tariffs were supposed to accomplish, the answer to that question is clearly no.

We were promised a boon in manufacturing.

We've certainly not seen that in many cases.

We've seen a contraction in manufacturing.

It's become more expensive for businesses to import products to use to make goods.

In the United States, it's made goods more expensive for consumers.

So far from being a boon for the American economy and a boom for the US Consumer, we're seeing quite the opposite.

That's Abigail hall, an associate professor in economics at the University of Tampa.