Trade Update

The U.S. Supreme Court has not yet ruled on the President's tariffs under the International Economic Emergency Powers Act (IEEPA), but the President's recent tariff announcements give us some insight into how the Administration may move forward should the tariffs be overturned. Our analysis of the "Greenland tariffs" is outlined below.

The "Greenland Tariffs” on the UK and EU Nations 

Earlier this week, the President announced plans to impose 10% tariffs on eight countries until a deal is reached for the U.S. to purchase Greenland.

What We Know

• The threatened tariffs would apply to the following eight nations: Denmark, Finland, France, Germany, Netherlands, Norway, Sweden, and the United Kingdom (UK).

• Tariffs would be set at 10% on all goods from these countries and start on February 1, 2026.

• Tariffs would rise to 25% on June 1, 2026. 

• Tariffs will remain in place until “a Deal is reached for the Complete and Total purchase of Greenland."

• The UK is already subject to 10% baseline tariff under a deal made with the U.S. in June 2025.

• All of the European Union (EU) nations listed above are already subject to a 15% baseline tariff per a trade deal made in July 2025.

• New "Greenland tariffs" would be stacked on top of existing tariffs for as long as those tariffs are in place.

• The existing UK and EU tariffs were implemented using IEEPA and are currently under judicial review. Those could be repealed by the Supreme Court this week or next.

• U.S. Trade Representative Jamieson Greer said that the Greenland tariffs are for national security purposes. He did not specify what legal authority the White House might use to enact the new tariffs. 

• Based on what we know, it seems likely the White House would try to use authority under Section 232, Section 338, or even IEEPA again in a more targeted manner. 

Potential Objectives  

The President’s tariff announcement seems to have caught some lawmakers off guard. While it should never come as a true surprise when President Trump announces a new tariff, there has been little support or response from Republicans. 

As we’ve reiterated, President Trump is committed to tariffs in any form. He views them not only as a useful leverage tool to cajole other countries, but as a positive economic good in and of themselves. For the time being, there is no one in the White House who will push back against the President's instinct. 

Besides what has been stated, there is another potential reason for the timing of these duties. These tariffs would serve as a convenient replacement if the current tariffs on the UK and EU are repealed by the Supreme Court's decision on IEEPA. Most Court observers think that the White House lost the argument when it came to using IEEPA to justify blanket reciprocal tariffs. 

President Trump used those tariffs to leverage deals with the UK and EU. We believe the White House has been searching for tariffs that could replace the baseline reciprocals in the event the Supreme Court decides against the President on IEEPA. These newly announced tariffs could be a part of that patchwork.