US tariffs – IEEPA appeal

Background

Amid continued shifts in US trade policy and the fast-moving landscape of tariff implementation and alongside wider developments in global trade and tax, staying up to date with the key updates in this week's round-up on Tariffs, Global Tax and more continues to be of utmost importance for all impacted businesses.  

The week in summary 

With the US continuing to advance its trade enforcement agenda, this week brought several notable developments: a formal appeal of the IEEPA tariff ruling, confirmation of the increased Section 232 duties, and early signs that the EU may accelerate its trade response mechanisms. Key updates are below.

IEEPA appeal lodged by the Trump administration 

The Trump administration has formally appealed the recent US Court of International Trade decision that found tariffs imposed under the International Emergency Economic Powers Act (IEEPA) unlawful. The court had ruled that trade deficits do not constitute the type of "unusual and extraordinary threat" required to trigger emergency powers under the Act.  

A stay on the ruling is currently in place, meaning the 10% tariffs will remain in effect during the appeal process. While the outcome is uncertain and likely to take time, importers may wish to consider protective claims to preserve any future refund entitlements should the decision be upheld. 

Section 232 tariffs increased and UK secures temporary relief 

Following its recent investigation, the US has confirmed that Section 232 tariffs on certain steel and aluminium products will increase from 25% to 50% as of 4 June. The action has been framed as necessary to address national security concerns related to excess capacity and market distortion. 

In a move that will surely please the government in London, the UK has been granted a temporary exclusion from the additional duties, an outcome that may reflect ongoing bilateral discussions on quota-based arrangements. However, President Trump indicated he could yet hit the UK with the higher rate if his commerce secretary Howard Lutnick “determines that the United Kingdom has not complied with relevant aspects” of the agreement after a July 9 deadline.  

This increase has elicited strong reactions from industry stakeholders. In the UK, manufacturers have expressed apprehension about the potential impact on their operations. For instance, a representative from Brandauer, a Birmingham-based precision component manufacturer, noted: "continual changes to tariff policy were damaging and creating uncertainty for business.”  

US-China relations 

Although, on 12 May, the US and China announced a 90-day agreement to reduce tariffs and facilitate further negotiations, events of the last week have led to questions on the progress of these talks or the solidity of the agreement.   

Last Friday, President Trump accused China of violating its preliminary trade agreement with the U.S. In a social media post, President Trump wrote, “China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”. In response, on Tuesday, China’s foreign minister Wang Yi called on Washington to “create the necessary conditions for the return of China-US relations to the right track”, accusing Washington of recently taking “a series of negative measures on unfounded grounds, undermining China’s legitimate rights and interests”.  

Further comments were made on Wednesday by President Trump indicating that President Xi of China is “very tough and extremely hard to make a deal with”. How this will progress over the coming weeks will be key to understanding the possible long-term direction of US-China trade and imposition of tariffs between the two superpowers.   

EU signals readiness to respond 

In parallel, the European Commission is reportedly exploring options to fast-track trade countermeasures should US tariff escalation continue. According to recent reports, EU officials are examining available WTO-compliant tools and considering whether existing procedures could be accelerated in response to further US action.  

While no formal response has been triggered, the Commission's shift in tone suggests that contingency planning is underway. Following talks with US trade representative Jamison Greer on Wednesday, Commissioner Sefcovic said the new American levies on steel and aluminium imports were not helpful.  “Our goal is to maintain the momentum,” the EU trade commissioner told reporters in Paris, where he was attending a conference at the Organisation for Economic Co-operation and Development (OECD).  “I believe we can achieve positive result,” he said. “But we are also ready to defend our interests and do the utmost to rebalance our trade relationship.” Businesses operating across transatlantic supply chains-particularly those in sectors previously impacted by US-EU trade tensions-should continue monitoring closely.   

On Wednesday, European Union Trade Commissioner Maros Sefcovic announced he had held productive talks with US trade representative Jamieson Greer, as both sides attempted to find a deal over trade tariffs, writing on X “Had a productive and constructive discussion with @USTradeRep Ambassador Greer on the margins of the @OECD Trade Ministerial. We’re advancing in the right direction at pace – and staying in close contact to maintain the momentum,”  

OECD outlook 

The OECD has cautioned that Ireland's strong trade links with the US leave it vulnerable to growing protectionist risks, particularly under the current Trump administration. With the US accounting for a significant amount of Irish exports, the report warns that further tariffs or non-tariff trade barriers could dampen growth and deepen fiscal challenges, especially given Ireland's reliance on multinational activity for both trade and tax receipts.  

Key figures from the OECD's latest forecast: 

• GDP growth is projected at 3.7% in 2025, falling to 2.3% in 2026, driven in part by weaker global demand and rising trade fragmentation. 

• Modified Domestic Demand – which strips out multinational distortions – is expected to grow by just 2.2% in 2025 and 2.1% in 2026, below the long-term average of 2.7%.  

To reduce exposure, the OECD recommends Ireland prioritise productivity-enhancing reforms, better infrastructure, and stricter public spending controls, with a particular focus on longer-term resilience in a more fragmented trade environment. 

Impact on the aircraft industry  

The Aerospace Industries Association, representing major aerospace firms including Boeing and Airbus, has raised concerns over proposed new US tariffs on imported commercial aircraft, jet engines, and parts. The association warned that such tariffs could jeopardize national security, aviation safety, and the supply chain. They have requested a 90-day extension for public comments opened under Section 232 review of such products and a 180-day delay on any new tariffs to allow for further consultation with industry stakeholders.  

This week, key developments emerged in the aviation engine manufacturing sector, with GE Aerospace and CFM International notifying lessors of their intent to introduce tariff-related surcharges on all parts and engines. These surcharges, prompted by anticipated U.S. tariffs, could result in a minimum 1.5% increase in pricing. GE Aerospace CEO Larry Culp disclosed that the company has already absorbed approximately $500 million in residual tariff costs and now seeks to pass a portion of that burden onto customers.   

Industry stakeholders, including engine lessors, have expressed concern over the financial implications of these adjustments. Speaking at recent industry conferences, executives warned that the added costs will likely be reflected in higher lease rates, with some adopting a cautious “wait and see” approach. While the full impact of the proposed surcharges remains uncertain, companies in this space should prepare for potential cost increases in engine procurement and leasing agreements.

We’re here to help you

Keeping up to date with US trade policies, trade agreements and new and existing tariff reviews which may lead to further tariff measures is crucial to assessing the risk to your supply chain and the impact these tariffs may have. Understanding your product portfolio and the impact that tariffs may have on your imports is an important first step. We are here to support your business with this analysis and navigating these choppy waters.