President Donald Trump has called upon the European Union (EU) to join the United States in imposing trade penalties against China and India as he aims to push Russia to end its assault on Ukraine.
According to various reports, the president made a request that the European trade bloc hit both countries with duties worth up to 100 percent during a Tuesday phone call. U.S. and EU officials were engaged in a discussion about the pressure campaign against Russia and how to force an end to the conflict.
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A senior official involved in the meeting said the U.S. was ready to “mirror” any tariffs imposed by the EU on China and India, the Financial Times reported. Any new tariffs would add to the steep, 50 percent duty burden India incurred in August and the 30 percent tariffs on China that have been deferred until Nov. 10. Following the meeting with EU officials, Trump told reporters that he expects to have a phone call with Putin this week or early next week.
The president is walking a tariff tightrope as his trade agenda awaits the scrutiny of the Supreme Court. With the future of his International Emergency Economic Powers Act (IEEPA) duties on the line, the Commander in Chief is continuing to negotiate with U.S. trade partners—even while encouraging trade partners to enact penalties.
The same day that the meeting with EU officials took place, Trump publicly announced that negotiations with India were still underway to address the trade barriers between the two nations. He said he looked forward to speaking with Indian Prime Minister Narendra Modi in the coming weeks and expected “no difficulty” in coming to a resolution.
“There’s an expression of openness to reaching an agreement with India, so that [tariff rate] may come back down,” Dave Townsend, a partner at Dorsey & Whitney LLP’s International Trade Group, told Sourcing Journal.
According to the lawyer, who represents clients in trade litigation, including matters before the Department of Commerce, the International Trade Commission, and the U.S. Customs and Border Protection (CBP), many are opting to put off decision-making surrounding sourcing as they await a clearer picture of the trade landscape.
“There have been some clarities at the beginning of August on [tariff rates], but if you were looking to reach a major supply agreement with somebody from India right now, I think you’d be saying, ‘Can we wait a couple of months?’”
Alternately, clients have been revising their import strategies in recent months to favor tools that allow for duty payment deferral. “You can put something into a bonded warehouse that’s technically sitting in the United States, but legally speaking, it’s outside the customs jurisdiction,” he explained.
Firms have also opened up their sourcing portfolios to spread out the risk, jumping from China-plus-one to China-plus-many. “I think a lot of companies took away from the Section 301 tariffs from the first Trump administration (which continued with President Biden and continue today) that diversification can give them better options,” Townsend said. “But this time is more complicated because of the ongoing framework agreements that the administration is negotiating, plus the volatility in the tariff rates themselves across the board.”
Townsend said the instances where cases related to trade have come before the Supreme Court throughout his career have been “few and far between—and given the unprecedented nature of using IEEPA to impose tariffs, this is altogether a novel issue for the Supreme Court to consider.”
While the Supreme Court has acquiesced to the administration’s appeal for an expedited schedule, with briefings from all parties due Sept. 19 and oral arguments set to begin in November, Townsend said it’s possible that it will not issue an opinion on the matter until 2026.
Should the Supreme Court rule against the administration’s interests, officially deeming the tariffs illegal, what happens then?
“This is a complicated question—just because the Supreme Court has, if they were to make that ruling, discretion to fashion a remedy that they think is appropriate,” Townsend said.
There are a number of different avenues for remediation, he believes. “One would be they could direct some sort of administrative process to be undertaken to further refund tariffs to U.S. importers. Two, they could say something like, ‘The remedy is limited to the plaintiffs only,’ in which case there would have to be a flood of litigation from everybody else to get their refund. And three, there’s already an administrative protest process at customs for importers to seek duties that they’ve paid but believe were unlawfully kept by customs.”
Typically, though, the basis for such protests would be narrower—for example, if customs were to process an entry under a tariff classification that the importer disagrees with, like a stated country of origin that doesn’t match with their records.
Townsend said that while there are a number of lawsuits at play, “We haven’t yet seen a flood of litigation over the IEEPA tariffs; there’s a lot of cases, but there’s not that many actual plaintiffs who are alleging that they’re illegal.” In his view, this points to a widespread attitude among importers that the issue will be resolved through either a protest mechanism or another process for collecting refunds. Whether the government puts the onus on the importer to prove what they are owed is yet to be seen.
Townsend said he believes the administration’s choice to use IEEPA as its method of imposing the tariffs was a matter of “expediency”—wanting to force a resolution to the trade negotiations that would allow the president to impose tariffs right away. As Treasury Secretary Scott Bessent said earlier this week, the administration has other avenues to explore if the Supreme Court deems the IEEPA tariffs unlawful.
“There are authorities for temporary global import tariffs that they could use,” including temporary import ban under Section 301 like Trump used during his first term against China “to avoid having much of a gap between the current the IEEPA tariffs and whatever Plan B might look like.”
“Whether that, in turn, is susceptible to being overturned, is kind of uncertain,” he added. “That would be done different statutory basis, which then would create a different legal issue as to whether it’s sound or not.”
