With the Supreme Court’s rebuke of President Donald Trump’s emergency tariffs Friday—and Trump's pledge to apply “obnoxious” new taxes in turn—a major trade partner has moved to pump the brakes on a deal the president’s import taxes helped facilitate last summer.
EU officials are pausing work to carry through a U.S.-EU trade deal outlined in July—which would cap tariffs on many European exports, including branded pharmaceuticals, at 15%—as things become “more uncertain than ever,” Bernd Lange, chair of the European Parliament’s Committee on International Trade, said in a statement Monday.
Prior to the official announcement through the European Parliament, Lange warned on X of “pure tariff chaos from the US administration,” later stressing once the pause was confirmed that clarity and “legal certainty” are essential before European lawmakers can take further steps to ratify the deal.
A vote to advance the deal that was scheduled for Tuesday, Feb. 24, will now “not take place as planned,” with representatives on the EU trade committee slated to reassess the situation next week, according to Lange’s statement through the European Parliament.
“The ruling by the Supreme Court of the United States of 20 February 2026 on the use of the International Emergency Economic Powers Act (IEEPA) is clear and unequivocal,” he explained. “Its implications cannot be ignored, and business as usual is not an option.”
The EU’s change in tack comes after the U.S. Supreme Court last Friday ruled 6-3 that Trump’s use of the IEEPA to unilaterally impose tariffs constituted an overreach of the president’s authority under the law, reasserting Congress’ power over fiscal matters.
The ruling strikes down the so-called “Liberation Day’ tariffs Trump unveiled last April, which imposed reciprocal tariffs on a country-by-country basis and helped inform deals that the U.S. has struck not just with the EU, but also countries like the U.K., Japan and Switzerland. That said, the justices’ ruling does not account for industry-specific Section 232 tariffs under the U.S. Trade Expansion Act.
The U.S. has initiated a Section 232 investigation into the pharmaceutical industry, but that probe has yet to produce any drug-specific tariffs, and, in the meantime, more than a dozen large pharmaceutical makers have penned drug pricing deals and manufacturing pledges with the White House that confer trade duty immunity for set periods of time.
Meanwhile, in retaliation to the Supreme Court’s decision last week, Trump swiftly threatened to impose a new 15% global tariff to make up for his invalidated levies.
Pharmaceuticals and pharmaceutical ingredients are exempt from Trump’s new 15% “temporary import duty,” according to a White House fact sheet issued late last week.
Some industry watchers expect pharmaceutical tariffs to take form in the Section 232 duties, although the exact implications of recent U.S. trade policy on the industry have been difficult to fully gauge.
Aside from the 15% rate broadly applied to European imports in the proposed U.S.-EU deal, the U.S. last year further committed to imposing a most-favored-nation tariff rate on generic pharmaceuticals from the EU, including ingredients and precursors, that effectively works out to zero in many instances.
Although Trump's latest tariff announcement would seem to spare European drugmakers' products, the threat of compounding import tax rates on other goods isn't flying with EU officials.
“The proposed replacement for IEEPA, Section 122, applies indiscriminately to all countries exporting to the United States and is imposed on top of the Most Favoured Nation (MFN) rate,” the EU trade committee’s Lange said of the bloc’s rationale, referencing Trump’s latest tariff gambit.
“As a result, imports from the EU into the US would be subject to an applied rate exceeding the 15% threshold,” he explained, adding that the increased rate would constitute “a clear departure” from the original terms of the EU deal.
The world reacts
In the aftermath of the SCOTUS decision, U.S. trade representative Jamieson Greer told CBS on Sunday that he expects the White House and its trading partners to “stand by” the deals they’ve struck over recent months.
"And I haven't heard anyone yet come to me and say, 'the deal's off,'” Greer said on "Face the Nation." “They want to see how this plays out."
The U.K., which has secured itself a somewhat sweeter trade deal than other U.S. partners—especially insofar as pharmaceuticals are concerned—has said it expects its “privileged trading position with the U.S. to continue,” according to The Wall Street Journal.
China’s commerce ministry said it was assessing the U.S. ruling and urged the U.S. to lift unilateral tariff measures, according to the WSJ, which also reported Monday that Indian officials had delayed a trip to the U.S. to finalize their country’s trade deal given the fresh uncertainty.
The confusion now surrounding various U.S. trade deals illustrates that Trump’s tariffs, while undoubtedly an effective tool in achieving economic concessions, remain highly mercurial and difficult to pin stable policy on.
That issue came into focus last month when Trump’s amped-up bid to acquire the autonomous Danish territory of Greenland inspired the president to briefly threaten—and then swiftly call off—a new 10% duty on key European allies that had shown support for the territory.
That threat also threw the fate of the U.S.-EU trade deal into question for a brief period.