Tariff chaos is back as Europe-U.S. trade deal is in question

Quartz · Allen J. Schaben/Los Angeles Times via Getty Images

Catherine Baab

Mon, February 23, 2026 at 10:56 PM GMT+9 2 min read

The European Union is hitting pause on its trade deal with the U.S., but not because of problems on Europe’s end.

E.U. lawmakers this weekend moved to suspend ratification of the transatlantic trade agreement following the Supreme Court’s ruling that President Donald Trump lacks unilateral authority under the International Emergency Economic Powers Act to impose his sweeping “Liberation Day” tariffs. The European Parliament’s largest political blocs plan to withhold legislative approval until they have clarity as to what Trump’s tariff strategy actually is, including its basis in U.S. law, Bloomberg reports.

Meanwhile, U.S. Customs and Border Protection announced it would stop collecting the struck-down IEEPA tariffs at 12:01 a.m. Tuesday. Still, that hard stop will arrive alongside Trump’s latest workaround, namely a 15% global tariff imposed under Section 122 of the 1974 Trade Act. Whatever the precise purported legal basis, Trump has said plainly that he will continue to pursue imposing tariffs on trading partners.

Trump’s tariffs are dead. Long live Trump’s tariffs?

The E.U.-U.S. trade deal, negotiated last summer between Trump and European Commission President Ursula von der Leyen, would have seen a 15% tariff rate on most E.U. exports to the U.S., while stripping tariffs on American industrial goods headed into Europe. European lawmakers had been aiming to ratify the deal in March. That timeline now looks to be suspended.

In the U.S., there’s also now the question of what to do with tariffs already collected. The Supreme Court’s ruling potentially puts some $150 billion in tariff revenue at risk of refund, even as the justices left that issue for someone else to sort out. Other Trump tariffs, including those on steel and aluminum imposed under Section 232, remain in place for the time being.

Trump attacked the Court for its ruling, which was at least partially expected after skeptical questioning from the Court in late 2025.

Volatility grips U.S. markets amid latest reversal

U.S. stocks appeared set to open in the red. Futures tied to the S&P 500 and the Dow Jones Industrial Average dipped about 0.5% and the Nasdaq fell even more, sinking 0.6%. The VIX, widely regarded as Wall Street’s fear gauge, spiked almost 8%.

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