The Trump administration’s tariff policy poses significant challenges for German exporters. Medium-sized enterprises that depend on US markets or are integrated into global supply chains are particularly affected.

The legal landscape shifted dramatically on 20 February 2026, when the US Supreme Court ruled 6-3 that the IEEPA-based tariffs were illegal. However, this has not ended the uncertainty for German companies: Trump swiftly announced a replacement 15% global tariff under separate legal authority, and US Customs and Border Protection (CBP) has yet to provide clear guidance on refunds for the billions already collected. The situation continues to evolve rapidly, making well-founded legal advice more essential than ever.

As an internationally active full-service law firm, Schlun & Elseven Rechtsanwälte comprehensively supports German exporters with all questions surrounding the Trump administration’s tariff policy and Germany. Our experienced attorneys review your refund claims, advise on contract adjustments, and represent you both out of court and in court – throughout Germany and internationally.

February 2026: What Has Changed

Supreme Court ruling: On 20 February 2026, the US Supreme Court issued its definitive ruling. Writing for a 6-3 majority, Chief Justice John Roberts held that the IEEPA tariffs were unlawful, finding that the emergency authority Trump relied upon “falls short” of the clear congressional authorisation required for measures of such breadth and scope. The ruling invalidated the country-by-country “reciprocal” tariffs as well as the 25% fentanyl-linked tariffs on goods from Canada, China, and Mexico. Tariffs imposed under separate legal authority – including those on steel and aluminium – remain in place.

Trump’s response and new 15% tariff: Trump immediately announced a replacement tariff under Section 122 of the 1974 Trade Act — a provision never previously used in this way. Initially set at 10%, this was raised to 15% the following day, reaching the maximum permitted under the law. This new levy came into force on 24 February 2026. Under Section 122, it can remain in effect for up to 150 days, after which congressional approval would be required to extend it. CBP confirmed it would cease collecting IEEPA-based tariff codes as of 24 February, but has provided no guidance to date on refunds for the substantial sums collected under the now-illegal measures.

US Tariff Policy: The Current Legal Situation

The US tariffs introduced by President Trump (“Trump tariffs”) have shaped transatlantic trade since early 2025. German companies, particularly those in the automotive, mechanical engineering, and chemical industries, are under particular pressure.

Since February 2025, the US government has imposed new import tariffs on numerous products, with the stated goal of balancing trade deficits and exerting political pressure on partner countries. For German exporters, the tariffs have meant cost increases, planning uncertainty, and significant new legal risks.

The chronology of events illustrates the dynamic nature of this rapid development:

February 2025: The first tariff wave hits neighbouring countries. President Trump introduced the so-called “Trafficking Tariffs”: 25% tariffs on goods from Canada and Mexico, as well as 10–20% on Chinese products. For German companies, initial burdens emerged for automotive and machinery exports due to changed supply chains.

March 2025: Energy tariffs burden the chemical industry. President Trump imposed 25% punitive tariffs on imports from countries that purchase Venezuelan oil. German chemical companies recorded additional cost burdens for energy-intensive production.
April 2025: Introduction of “Reciprocal Tariffs” with a base rate of 10% and surcharges up to 50%. German exports to the US became more expensive across all industries. A “universal” tariff was imposed on practically all US imports over $800.

April 2025: 25% tariffs on EU imports of vehicles and auto parts. The extension of the measures in May also burdened the German automotive industry and its supplier chains.

May 2025: First legal defeat. The US Court of International Trade declared the tariffs illegal but temporarily allowed them to remain in place. German exporters faced increased legal uncertainty regarding investment decisions.

August 2025: A federal appeals court confirms the illegality of President Trump’s tariffs, determining that the President had exceeded his authority under the International Emergency Economic Powers Act (IEEPA).

September 2025: The Trump administration appealed to the Supreme Court. In parallel, initial raw materials and pharmaceutical exceptions were issued.

For the outcome of that appeal and the current legal position, see the February 2026 update above.

Impact on the EU–US Trade Framework

In July 2025, the EU and the US reached a trade agreement setting a 15% tariff on most EU goods – a deal that required difficult negotiations and is still pending European Parliament ratification. The Supreme Court ruling has now introduced fresh complications for that framework. The EU has called on the US to honour that agreement, stating that “a deal is a deal,” while Trump’s new universal 15% tariff raises questions about how the two frameworks interact. The planned European Parliament vote on the July 2025 deal has been postponed pending clarification.

German Chancellor Friedrich Merz responded cautiously to the ruling, welcoming the prospect of a lower overall tariff burden for the German economy but warning that the “biggest poison” for both European and US economies is the ongoing uncertainty. The speed of developments underlined that point vividly: within hours of Merz commenting on Trump’s initial replacement levy of 10%, the figure had already been revised upward to 15%. Merz stressed that he would travel to Washington with a coordinated EU position, noting that tariff policy is a matter for the European Union as a whole rather than individual member states. He also confirmed that sectoral tariffs on cars, steel, and aluminium appear to remain in place despite the ruling — a particularly significant detail for German exporters in those industries.

US Tariffs: Industry-Specific Impacts

US tariffs affect German industries with varying intensity. While some sectors are particularly vulnerable due to their market position and production structure, others can better offset the burdens.

Impact on the Automotive Industry

German automakers are at the center of American tariff policy, accounting for approximately 65% of all EU auto exports. The automotive sector faces a complex situation: the now-invalidated reciprocal tariffs have been replaced by the new 15% global levy, while 25% tariffs on vehicles imposed under separate authority may remain in effect pending further legal clarification.

BMW announced price increases of 4% for models imported from Mexico in May 2025, followed by broad average increases of 1.9% for nearly all 2026 models in the US. The company quantified the tariff burden as a 1.25 percentage-point reduction in profit margin. Mercedes-Benz pursued a different strategy by fully absorbing tariffs on the 2025 model year to maintain its US market position. Volkswagen projected a profit decline from €7.1 billion to €3.3 billion for the fiscal year 2025.

Impact on the Pharmaceutical Industry

The situation remains particularly uncertain for German pharmaceutical companies. Prior to the Supreme Court ruling, the US government had threatened to gradually increase tariffs to up to 250% within 18 months to incentivize the relocation of pharmaceutical production to the US. The new 15% universal tariff now applies in this sector, though raw materials exceptions issued in September 2025 may provide partial relief. Bayer AG, whose stock lost approximately 10% of its value following the earlier tariff announcements, continues to monitor the situation closely.

Legal and Strategic Options for German Companies

The Supreme Court ruling and the introduction of replacement tariffs create both new opportunities and urgent action requirements for affected German companies.

  • Pursuing refund claims: German importers should now act promptly to document and preserve all IEEPA tariff payments made since February 2025. The Supreme Court ruling means that substantial sums previously collected under those measures are potentially subject to refund. CBP has not yet issued guidance on refund procedures, making thorough documentation and legal counsel essential. Deadlines for filing claims may apply, and all receipts should be systematically secured.
  • Assessing the new 15% tariff: The replacement tariff under the 1974 Trade Act requires immediate assessment. Companies should review how they interact with any applicable trade agreements, whether existing pricing structures and contracts remain viable, and what options exist if Congress does not approve an extension beyond the 150-day limit.
  • Contract review: Existing supply contracts should be reviewed for price adjustment and force majeure clauses in light of both the removal of the IEEPA tariffs and the introduction of the new universal levy.
  • Operational measures: Cash management must account for continuing tariff obligations under the new framework. Alternative supply chain structures and US production locations should continue to be evaluated, as the broader political direction of US trade policy remains unpredictable.
  • Supply chain diversification: Geographic diversification of US market exposure remains advisable regardless of the legal outcome. Bonded warehouses, duty drawback programmes, and free trade zones continue to offer operational advantages.

Optimisation of First Sale for Export regulations can unlock additional savings potential.

Outlook: What Comes Next

The Supreme Court’s ruling has resolved one major legal question while opening several new ones. German exporters now face three concurrent uncertainties: whether the US will provide meaningful refund access for illegally collected tariffs; how the new 15% global tariff under the 1974 Trade Act will be applied and whether it will be extended beyond the 150-day window; and whether the EU–US trade deal of July 2025 will survive the current turbulence intact.

Chancellor Merz’s planned visit to Washington and the EU’s coordinated diplomatic position will be closely watched. As the German government itself has acknowledged, the primary concern for European business is not simply the level of tariffs but the persistent uncertainty surrounding them. Whatever the ultimate outcome, the tariff crisis has demonstrated how rapidly international trade frameworks can shift — sometimes within a matter of hours, as the revision from 10% to 15% in a single day illustrated. German companies should ensure their legal and commercial strategies are prepared for continued volatility. Schlun & Elseven Rechtsanwälte is available to advise on refund claims, contract adjustments, and strategic positioning as this situation develops.