When Donald Trump invited people to the Rose Garden of the White House exactly a year ago, it was already clear to many that something big was coming. It should be about tariffs, about “unfair trade” and the American economy. The US President celebrated it as “Liberation Day”. In Germany, the EU and other parts of the world, however, his customs tariffs caused horror. Many saw the world on the brink of a trade war.
The US President hit almost the entire world with tariffs that day – and didn’t stop at traditional partners either: “In many cases, the friend is worse than the enemy,” he said. The US economy had been “looted,” “robbed,” and “raped.” Now is the time to defend yourself against it.
Since then, governments, companies, consumers and courts have been grappling with the consequences. In a landmark ruling in February, the US Supreme Court largely struck down the tariffs based on their legal basis. Trump then resorted to the next tariff law. Where Trump’s tariff offensive will lead is still unclear a year later.
These three construction sites could slow down Trump’s tariff plans.
1. Can Trump’s government keep the billions in tariffs?
The tariffs are important for the US government for two reasons: Firstly, it is hoped that more companies will settle in the USA instead of exporting there. The US trade deficit with the EU has been a thorn in Trump’s side for years.
On the other hand, Trump is targeting revenue from tariffs to finance tax relief, among other things. But how much of the customs revenue goes to the government is unclear.
A few weeks ago, a New York court cleared the way for companies to receive refunds. Importers are therefore entitled to refunds for customs duties already paid, provided that these are the duties collected by the US Supreme Court. According to calculations by the University of Pennsylvania, it is about 175 billion US dollars. That would correspond to around 2.5 percent of the budget. The US logistics company Fedex, among others, filed a lawsuit after the verdict.
2. How reliable is Trump’s new tariff instrument?
Immediately after the ruling, Trump already had the next tariff tool ready: first 10, then 15 percent. The US president relied on a 1974 trade law that allows him to impose tariffs on imports for up to 150 days. After that, congressional approval would be required.
However, experts believe that such an extension is unlikely a few months before the midterm elections in November: the tariffs are not only unpopular among trading partners, but also among their own population.
It is conceivable that Trump will switch to a different law from the summer. His government recently launched an investigation into whether structural overcapacity among trading partners is detrimental to the US economy – including in individual sectors of the European Union. In the past, the USA had used this mechanism to impose punitive tariffs against China.
No matter which tariff law Trump ultimately relies on, the Supreme Court’s ruling generally sets strict limits on the president’s ability to impose tariffs. But it could be years before the courts provide clarity – a problem that might no longer affect Trump as president.
3. EU Parliament calls for changes – EU deal remains open
A year after Liberation Day, there is still a hangover feeling in the EU. After tough negotiations, the international community managed to avert impending tariffs of 30 percent. However, the EU had to swallow a lot of money for the deal finalized at Trump’s golf resort in Turnberry, Scotland at the end of July.
In addition, from the EU perspective, the United States has already violated the agreement several times. Just a few weeks after completion, tariffs on more than 400 products containing steel or aluminum were increased from 15 to 50 percent.
The European Parliament in particular wants to link points in the agreement to security clauses and thus force Trump to keep his promises. It also demands that the USA also reduce the remaining tariffs on EU steel and aluminum derivatives to 15 percent within six months of entry into force. The US ambassador to the EU, Andrew Puzder, had previously warned the EU against making any changes to the agreement.
German companies still face an uncertain future
The tariff earthquake of “Liberation Day” left a clear mark on the German economy: in 2025, exports to the USA collapsed – and China replaced the United States as the most important trading partner. “Massive tariff increases, sudden changes and ongoing legal uncertainty are noticeably slowing down trade with our most important sales market,” said Melanie Vogelbach, DIHK economic policy expert.
From the USA’s point of view, the tariffs have now missed their target, said Vogelbach. Direct investments from Germany to the USA have declined significantly – and companies want to reduce them further. “The US government’s intended relocation of production to the USA at the expense of Europe will therefore not happen.”
