Chancellor Merz Flies to Washington: Battle Over European Export Future and Billion-Dollar Refunds

The situation in trade relations between the United States and its key partners, including the European Union, has entered a phase of deep uncertainty. The cause of the crisis is a US Supreme Court ruling which found that President Donald Trump exceeded his statutory authority by imposing universal tariffs based on the IEEPA statute without explicit consent from Congress. This ruling, issued by a 6 to 3 majority, invalidated the tariffs, which, according to analyses by the Wharton Budget Model, could open the door to claims for refunds of collected fees with a potential value ranging from $130 to $175 billion, although the issue of the refunds themselves requires further judicial resolution. In response, the White House immediately launched a "Plan B," introducing a new, 10 percent tariff rate based on other legal grounds, with an announcement of its imminent increase to 15 percent. For European leaders, including Chancellor Friedrich Merz, the key challenge is to maintain the conditions of last year's Turnberry agreement, which assumed a tariff cap of 15 percent. Berlin and Brussels fear that Trump's new levies will compound existing barriers, hitting exports of agricultural and machinery products. The situation is all the more difficult as the European Parliament has already decided to halt the implementation of concessions to the USA until Washington guarantees the stability of trade rules. Analysts at Allianz Trade describe the current state as "Schrödinger's tariffs" – a situation where trade barriers have formally disappeared but in practice still exist under new names, increasing operational risk for global business. The legal dispute over the scope of presidential power in the USA has its roots in the constitutional division of powers, where the right to impose taxes and tariffs traditionally belongs to Congress. However, since the 1970s, presidents have increasingly used emergency statutes, such as the IEEPA from 1977, to unilaterally shape trade policy.Parallel to diplomatic negotiations, a legal battle is being waged by thousands of companies. Over 1,800 companies, including giants like FedEx, Costco, and BASF, have filed lawsuits for the return of improperly collected tariffs. Some corporations, like FedEx, declare that recovered funds will be passed directly to customers who bore the costs of the increases. Meanwhile, the Trump administration is seeking ways to keep the cash in the budget, suggesting, among other things, expediting refund procedures in exchange for waiving part of the claims in favor of the state. The case also has a political dimension within the USA – Democrats are demanding direct payments to households, arguing that the average American family has lost about $1,700 annually due to tariff policy. „They take months and months to write an opinion and they don't even discuss that point. I guess it has to get litigated for the next two years.” — Donald Trump From a geopolitical perspective, the chaos in the USA may produce effects opposite to those intended by the administration. Instead of reducing dependence on China, the unpredictability of US policy is prompting Asia and Europe to seek alternative trade partnerships. Chancellor Merz, during a Tuesday lunch at the White House, will try to convince President Trump that stability is a necessary condition for the survival of transatlantic economic cooperation, although the history of relations so far suggests that Washington may not be inclined to make lasting concessions.