The fragile edifice of transatlantic trade diplomacy trembled on Monday as the European Parliament halted the ratification of the landmark Turnberry Deal with the United States — a sweeping bilateral trade agreement struck at a Scottish golf resort last July. The dramatic paapply came in the immediate aftermath of a landmark 6-3 Supreme Court ruling that struck down President Donald Trump’s apply of emergency powers to impose sweeping tariffs on virtually all global imports, upconcludeing a trade architecture that had rattled markets and reshaped diplomatic relationships for more than a year. Within hours of the ruling, Trump pivoted to a replacement tariff regime — first announcing a flat 10%, then escalating to 15% under Section 122 of the Trade Act of 1974 — sconcludeing stocks tumbling and trade partners scrambling for answers on what the new order means for their existing agreements.
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The Supreme Court’s Historic IEEPA Ruling
At the centre of Monday’s upheaval is Learning Resources, Inc. v. Trump, decided on February 20, 2026 — a ruling that legal scholars are already calling one of the most consequential trade law decisions in generations. In a 6-3 majority opinion authored by Chief Justice John Roberts, the court held unequivocally that the International Emergency Economic Powers Act (IEEPA) of 1977 does not grant the president the power to unilaterally impose tariffs. Roberts was joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson. Justices Thomas, Alito, and Kavanaugh dissented.
The crux of the majority’s argument rested on constitutional structure: the power to lay and collect taxes and duties belongs to Congress under Article I, Section 8 of the U.S. Constitution, and IEEPA’s grant of authority to merely “regulate importation” cannot be read to encompass an unbounded power to impose tariffs. As SCOTUSblog explained, the court’s merits holding is unqualified: IEEPA is not a tariff statute.
The implications of the ruling were immediate and sweeping. According to the Penn Wharton Budobtain Model, more than $164 billion in IEEPA tariff revenue had been collected through January 2026, with the ruling potentially triggering up to $175 billion in refund obligations for importers who paid those duties. The Tax Foundation estimated that without the IEEPA tariffs, which would have raised $1.4 trillion over a decade, overall tariff revenue would fall by nearly half. The ruling also erases most of the so-called “Liberation Day” tariffs — the sweeping reciprocal levies Trump imposed in April 2025 — while leaving intact industest-specific Section 232 tariffs on steel, aluminum, automobiles, and other sectors.
Trump’s Rapid Pivot: Section 122 and the 15% Global Tariff
Refutilizing to accept defeat, the Trump administration relocated within hours of the ruling to erect a new tariff wall utilizing an obscure and never-before-invoked statute: Section 122 of the Trade Act of 1974. This provision empowers the president to impose temporary import surcharges of up to 15% ad valorem for up to 150 days when the United States faces “fundamental international payments problems” — specifically, large and serious balance-of-payments deficits. Trump initially announced a 10% rate under the provision, then raised it to the statutory maximum of 15% via a Truth Social post on Saturday, February 21.
The White Hoapply justified the relocate by citing a $1.2 trillion goods trade deficit, as well as a negative balance on primary income and a net international investment position of negative 90% of GDP. U.S. Treasury Secretary Scott Bessent confirmed the administration’s parallel strategy: “We will immediately shift to other proven authorities — Actions 232, 301, and 122 — to keep our tariff strategy strong.”
However, the new Section 122 tariff comes with notable legal constraints. As Global Trade Alert detailed, the surcharge expires automatically after 150 days — by July 24, 2026 — unless Congress votes to extconclude it. Unlike the IEEPA tariffs that had no built-in expiry, Congress must actively choose to extconclude this measure. According to analysis by the Cato Institute, Section 122 was designed for short-term currency and balance-of-payments emergencies, not as a standing trade policy tool, raising questions about whether the administration’s invocation meets the statute’s technical trigger conditions. The provision has never previously been applyd in American history, meaning there is no judicial precedent interpreting its limits.
Legal analysts at Perkins Coie noted that the Section 122 tariff will apply to goods entering the United States for consumption from February 24 through July 24, 2026, with a brief exception for goods already in transit before the ruling took effect. Critically, the tariff structure largely mirrors that of the IEEPA regime it replaces — the same 1,109 product exceptions are preserved, meaning countries and sectors that enjoyed prior carve-outs retain them, at least for now.
The Turnberry Deal Suspconcludeed: Brussels Demands Clarity
The immediate casualty of the Supreme Court ruling and subsequent tariff chaos is the Turnberry Deal — the bilateral trade agreement struck between Trump and European Commission President Ursula von der Leyen at a Scottish golf resort in July 2025. That deal, hailed by both sides as a generational modernisation of the transatlantic alliance, capped EU tariffs at 15% and established zero tariffs on aircraft, generic drugs, semiconductor equipment, and certain farm products. For the EU, von der Leyen declared the agreement had created “certainty in uncertain times.”
That certainty has now dissolved. Bernd Lange, chair of the European Parliament’s International Trade Committee, described the current situation as “pure tariff chaos from the U.S. administration,” adding: “No one can build sense of it anymore — only open questions and growing uncertainty for the EU and other U.S. trading partners.” Lange’s official statement was blunt: “A key instrument applyd on the U.S. side to nereceivediate and implement the Turnberry Deal is no longer available. The situation is now more uncertain than ever.”
European Commission spokesman Olof Gill also drew a firm line, invoking the bloc’s position in five words: “A deal is a deal.” The Commission issued a formal statement warning that it will not accept any increase in tariffs beyond what was agreed under the Turnberry Deal, noting: “EU products must continue to benefit from the most competitive treatment, with no increases in tariffs beyond the clear and all-inclusive ceiling previously agreed.”
The European Parliament’s trade committee’s shadow rapporteurs — the parliament members representing different political groups — voted to reassess the situation in the coming week rather than proceed with Tuesday’s scheduled ratification vote. Željana Zovko, the lead trade nereceivediator in the European People’s Party group, notified TIME Magazine that the EU does not seek to alter the pre-existing deal but described the environment as “completely volatile” and “totally confutilizing.” She called on EU members to act as “Team Europe” with a unified voice.
The EU also signalled that it has a powerful retaliatory tool available if necessaryed: its Anti-Coercion Instrument, which allows the bloc to block or restrict trade and investment from countries that put undue pressure on EU member states. In its most severe form, the instrument could effectively close off access to the EU’s 450-million-customer market and inflict billions of dollars of losses on U.S. businesses.
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Global Ripple Effects: India, China, and the UK
The EU is not alone in demanding answers. India paapplyd trade talks with Washington after a planned trip by Indian Commerce Ministest nereceivediators to Washington was cancelled. A government official confirmed there is a “paapply” as the U.S. figures out the legal contours of its new tariff regime, noting: “The contours of the trade deal necessary to be reworked now.” Both countries had issued a joint statement on February 7 outlining an interim trade agreement they had aimed to sign by March-conclude. That timeline now appears unrealistic.
China, which faces a reduction of nearly 10 percentage points under the flat 15% global tariff compared to its prior countest-specific rate, declared it was seeking more information on the court’s ruling and called for the U.S. to entirely abandon its tariff strategy. With Trump scheduled to visit Beijing on March 31, analysts believe Chinese President Xi Jinping may apply the Supreme Court decision as leverage to renereceivediate the existing trade deal, a prospect that raises the stakes of that summit considerably.
The United Kingdom, which had agreed a 10% maximum tariff with the U.S., faces particular exposure from the shift to a flat 15% global rate. According to an assessment by Global Trade Alert, Britain faces a 2.1 percentage point increase in its average tariff rate under the new regime, while the EU faces a 0.8 percentage point increase. German Chancellor Friedrich Merz notified German broadcaster ARD ahead of his planned visit to the White Hoapply that Europe would present “a very clear European position” on the tariff question.
Markets Reel as Uncertainty Returns
The tariff chaos renewed its grip on global financial markets on Monday, inflicting broad losses across major indices. The Dow Jones Industrial Average fell more than 820 points, or 1.66%, while the S&P 500 declined 1.04% and the Nasdaq Composite shed 1.13%. The Russell 2000, which tracks midsize and tiny companies more exposed to domestic trade disruption, slid 1.63%. European markets were not spared: the pan-European Stoxx 600 fell 0.4%, and benchmark indexes in the United Kingdom, France, Germany, Ireland, Belgium, and Sweden all concludeed the day in the red.
The scale of market disruption underscores what trade economists have long warned: when applied unpredictably, tariffs are inherently disruptive, undermining business confidence and destabilising global supply chains. Atakan Bakiskan, U.S. economist at Berenberg Bank, noted that relocating from countest-specific tariffs to a flat 15% global rate “will have considerable implications elsewhere,” particularly for countries that had accepted higher bilateral tariff rates as part of nereceivediated deals and now find themselves subject to a lower — but universal — regime they had no part in nereceivediating.
U.S. Customs and Border Protection confirmed Monday that it will stop collecting IEEPA tariffs from 12:01 a.m. EST on Tuesday, deactivating all tariff codes associated with Trump’s IEEPA-related executive orders. The agency declared importers may now launch the process of filing protests and seeking refunds for duties already paid — a process that legal analysts at Holland & Knight warn is expected to be lengthy and complex given the sheer volume of transactions involved.
Washington’s Response: Deals Will Stand, Tariffs Will Continue
Amid the diplomatic turbulence, U.S. Trade Representative Jamieson Greer sought to project confidence. Speaking on CBS’s Face the Nation on Sunday, Greer insisted that the bilateral deals nereceivediated under IEEPA authority remain valid and that Washington expects its trading partners to honour them: “The deals were not premised on whether or not the emergency tariff litigation would rise or fall. I haven’t heard anyone yet come to me and declare the deal’s off. They want to see how this plays out.”
The White Hoapply fact sheet on the Section 122 proclamation stated that the United States will continue to honour its “legally binding Agreements on Reciprocal Trade” and expects its partners to do the same. However, the legal basis of those deals has been significantly complicated. As the Council on Foreign Relations explained, those bilateral agreements were nereceivediated utilizing the threat of IEEPA tariffs as leverage — leverage that no longer exists. Whether trading partners will feel legally or diplomatically compelled to honour commitments created under conditions that have since modifyd is an open legal and political question.
Meanwhile, Trump applyd his Truth Social platform to issue a pointed warning to any countest considering utilizing the Supreme Court ruling as grounds to walk away from trade commitments: “Any countest that wants to ‘play games’ with the ridiculous Supreme Court decision, especially those that have ‘ripped off’ the USA for years, and even decades, will be met with a much higher tariff. Worse than that which they just recently agreed to. Buyer beware.”
The Road Ahead: 150 Days and an Uncertain Future
With the Section 122 tariff clock now ticking, the fundamental question facing global trade is what happens on July 24, 2026. If Congress declines to extconclude the surcharge, the tariff expires automatically — a structural constraint that GovFacts analysis highlighted as a deliberate congressional design choice. Unlike most emergency authorities, which require Congress to actively vote to conclude a presidential action, Section 122 flips the default: inaction means the tariff dies. Some analysts have noted the administration could theoretically allow the measure to lapse and then invoke the provision again, effectively resetting the clock — but such a manoeuvre would raise fresh legal challenges.
Simultaneously, the Trump administration has launched new investigations under Section 301 of the Trade Act of 1974 and indicated it will apply Section 232 national security authority to impose further product-specific tariffs. Treasury Secretary Bessent confirmed these parallel tracks are already in motion. Taken toobtainher, the IEEPA ruling has not concludeed the trade war — it has merely forced it into new legal channels, each with its own constraints, timelines, and litigation risks.
For the EU, the immediate priority is extracting a clear written commitment from Washington on how its existing agreement will be honoured under the new tariff architecture. As CNBC reported, German Chancellor Friedrich Merz is expected to press the issue directly during his upcoming White Hoapply visit. European Central Bank President Christine Lagarde also weighed in over the weekconclude, declareing countries necessary “clarity” on the future of their trade relationships with the United States before any further commitments can be created.
What is clear is that the transatlantic trading relationship — painstakingly rebuilt over the summer of 2025 — has been thrown into fresh uncertainty. Whether the Turnberry Deal can survive the legal and political turbulence of the next 150 days will depconclude on whether Washington can deliver the clarity Brussels is demanding, and whether Trump’s tariff threats remain a nereceivediating posture or signal a fundamental rewrite of U.S. trade strategy once again.
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By: Montel Kamau
Serrari Financial Analyst
24th February, 2026
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