MILAN: The US Supreme Court ruling brings mixed sentiments. It knocked down a large part of President Donald Trump’s trade tariffs. The ruling affects European wine makers, chemical companies, and distillers. There is a sting in the tail: an even more uncertain trade outlook.
The top US court struck down Trump’s sweeping tariffs. This decision will ripple through the global economy. The tariffs were imposed under a law meant for use in national emergencies. This ruling handed a stinging defeat to the Republican president. Many businesses cheered after lengthy legal battles against tariffs. However, European trade groups, companies, and analysts worried. They feared the ruling might make trade relations even messier after last year’s hard-struck trade deals.
“This ruling … risks creating a boomerang effect. It produces further uncertainty and a freeze on orders. Operators are waiting for a clearer regulatory framework,” said Paolo Castelletti, secretary general of Italian wine association UIV.
The US is the top market for Italian wines with some 1.9 billion euros ($2.3 billion) in exports in 2024, making up almost a quarter of Italy’s total wine shipments globally. Many firms warned that Trump would look to other avenues to impose similar tariffs. This action could dull the benefit of lower levies. At the same time, the move might stoke tensions between the US and major trade partners. Tariff refunds will also be hard to get.
Trump responded to the ruling by announcing new global tariffs of 10pc for an initial 150-day period. He acknowledged it was not clear if or when there would be any refunds.
Uncertainty
Steve Ovara is the chair of the International Trade Practice Group at law firm King & Spalding. He said that companies his firm advises have specific expectations. These include large US manufacturers, as well as consumer and technology groups. They mostly expected any relief from tariffs to be short-lived.
“The major issue everybody’s going to be dealing with is some additional uncertainty,” he said. This will be the case for at least the short term. Wolfgang Grosse Entrup agreed. He is the managing director of German chemicals and pharmaceutical lobby VCI. This organization represents firms like BASF, Bayer, and Evonik.
“For our firms, this isn’t the start of a phase of stability, but a new round of uncertainty. Anyone who believes this means the tariff conflict is over is mistaken,” he said. “New tariffs based on a different legal basis are possible at any time.” Peter Sand, chief analyst at freight pricing platform Xeneta, said political risk remained for shippers. The trends to de-risk supply chains are an “irreversible trend.” “The damage to many shippers’ supply chains is largely done and probably won’t be undone,” he said.
No ‘silver bullet’
French cosmetics association FEBEA, which has firms like L’Oreal as members, said it was “very cautious” on the ruling. It would watch how the US government responded. This includes the possibility of potential new tariffs. “We are all accustomed to the complexities of customs duties. This is a subject full of twists and turns,” said FEBEA secretary general Emmanuel Guichard.
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