import

WASHINGTON  — The Supreme Court’s conservatives face a test of their own making this week as they decide whether President Trump had the legal authority to impose tariffs on imports from nations across the globe.

At issue are import taxes that are paid by American businesses and consumers.

Small-business owners had sued, including a maker of “learning toys” in Illinois and a New York importer of wines and spirits. They said Trump’s ever-changing tariffs had severely disrupted their businesses, and they won rulings declaring the president had exceeded his authority.

On Wednesday, the justices will hear their first major challenge to Trump’s claims of unilateral executive power. And the outcome is likely to turn on three doctrines that have been championed by the court’s conservatives.

First, they say the Constitution should be interpreted based on its original meaning. Its opening words say: “All legislative powers … shall be vested” in Congress, and the elected representatives “shall have the power to lay and collect taxes, duties, imposes and excises.”

Second, they believe the laws passed by Congress should be interpreted based on their words. They call this “textualism,” which rejects a more liberal and open-ended approach that included the general purpose of the law.

Trump and his lawyers say his sweeping “Liberation Day” tariffs were authorized by the International Economic Emergency Powers Act, or IEEPA.

That 1977 law says the president may declare a national emergency to “deal with any unusual and extraordinary threat” involving national security, foreign policy or the economy of the United States. Faced with such an emergency, he may “investigate, block … or regulate” the “importation or exportation” of any property.

Trump said the nation’s “persistent” balance of payments deficit over five decades was such an “unusual and extraordinary threat.”

In the past, the law has been used to impose sanctions or freeze the assets of Iran, Syria and North Korea or groups of terrorists. It does not use the words “tariffs” or “duties,” and it had not been used for tariffs prior to this year.

The third doctrine arose with Chief Justice John G. Roberts Jr. and is called the “major questions” doctrine.

He and the five other conservatives said they were skeptical of far-reaching and costly regulations issued by the Obama and Biden administrations involving matters such as climate change, student loan forgiveness or mandatory COVID-19 vaccinations for 84 million Americans.

Congress makes the laws, not federal regulators, they said in West Virginia vs. Environmental Protection Agency in 2022.

And unless there is a “clear congressional authorization,” Roberts said the court will not uphold assertions of “extravagant statutory power over the national economy.”

Now all three doctrines are before the justices, since the lower courts relied on them in ruling against Trump.

No one disputes that the president could impose sweeping worldwide tariffs if he had sought and won approval from the Republican-controlled Congress. However, he insisted the power was his alone.

In a social media post, Trump called the case on tariffs “one of the most important in the History of the Country. If a President is not allowed to use Tariffs, we will be at a major disadvantage against all other Countries throughout the World, especially the ‘Majors.’ In a true sense, we would be defenseless! Tariffs have brought us Great Wealth and National Security in the nine months that I have had the Honor to serve as President.”

Solicitor Gen. D. John Sauer, his top courtroom attorney, argues that tariffs involve foreign affairs and national security. And if so, the court should defer to the president.

“IEEPA authorizes the imposition of regulatory tariffs on foreign imports to deal with foreign threats — which crucially differ from domestic taxation,” he wrote last month.

For the same reason, “the major questions doctrine … does not apply here,” he said. It is limited to domestic matters, not foreign affairs, he argued.

Justice Brett M. Kavanaugh has sounded the same note in the past.

Sauer will also seek to persuade the court that the word “regulate” imports includes imposing tariffs.

The challengers are supported by prominent conservatives, including Stanford law professor Michael McConnell.

In 2001, he and John Roberts were nominated for a federal appeals court at the same time by President George W. Bush, and he later served with now-Justice Neil M. Gorsuch on the U.S. 10th Circuit Court of Appeals in Denver.

He is the lead counsel for one group of small-business owners.

“This case is what the American Revolution was all about. A tax wasn’t legitimate unless it was imposed by the people’s representatives,” McConnell said. “The president has no power to impose taxes on American citizens without Congress.”

His brief argues that Trump is claiming a power unlike any in American history.

“Until the 1900s, Congress exercised its tariff power directly, and every delegation since has been explicit and strictly limited,” he wrote in Trump vs. V.O.S. Selections. “Here, the government contends that the President may impose tariffs on the American people whenever he wants, at any rate he wants, for any countries and products he wants, for as long as he wants — simply by declaring longstanding U.S. trade deficits a national ‘emergency’ and an ‘unusual and extraordinary threat,’ declarations the government tells us are unreviewable. The president can even change his mind tomorrow and back again the day after that.”

He said the “major questions” doctrine fully applies here.

Two years ago, he noted the court called Biden’s proposed student loan forgiveness “staggering by any measure” because it could cost more than $430 billion. By comparison, he said, the Tax Foundation estimated that Trump’s tariffs will impose $1.7 trillion in new taxes on Americans by 2035.

The case figures to be a major test of whether the Roberts court will put any legal limits on Trump’s powers as president.

But the outcome will not be the final word on tariffs. Administration officials have said that if they lose, they will seek to impose them under other federal laws that involve national security.

Still pending before the court is an emergency appeal testing the president’s power to send National Guard troops to American cities over the objection of the governor and local officials.

Last week, the court asked for further briefs on the Militia Act of 1908, which says the president may call up the National Guard if he cannot “with the regular forces … execute the laws of the United States.”

The government had assumed the regular forces were the police and federal agents, but a law professor said the regular forces in the original law referred to the military.

The justices asked for a clarification from both sides by Nov. 17.

ABOARD AIR FORCE ONE — President Trump said Saturday that he plans to hike tariffs on imports of Canadian goods by an extra 10% because of an anti-tariff television ad aired by the province of Ontario.

The ad used the words of former President Reagan to criticize U.S. tariffs, angering Trump, who said he would end trade talks with Canada. Ontario’s Premier Doug Ford said he would pull the ad after the weekend, and it ran Friday night during the first game of the World Series.

“Their Advertisement was to be taken down, IMMEDIATELY, but they let it run last night during the World Series, knowing that it was a FRAUD,” Trump said in a post on his social media platform as he flew aboard Air Force One to Malaysia.

“Because of their serious misrepresentation of the facts, and hostile act, I am increasing the Tariff on Canada by 10% over and above what they are paying now.”

The ad used a recording of Reagan criticizing tariffs, though his comments were edited. He often criticized government policies — including protectionist measures such as tariffs — that interfered with free commerce and he spent much of that 1987 radio address spelling out the case against tariffs.

Trump and Canadian Prime Minister Mark Carney will both attend the Assn. of Southeast Asian Nations summit in Malaysia. But Trump told reporters traveling with him that he had no intention of meeting Carney there.

Schiefelbein writes for the Associated Press.

Three Sydney dockworkers were charged for 1,116-pound cocaine and $330,000 cash seized following a Multi Agency Strike Team investigation into trusted insiders facilitating the importation of illicit drugs.
File Photo by Angelina Katsanis/UPI | License Photo

Sept. 2 (UPI) — Australian authorities charged three Sydney dockworkers over a shipment of cocaine and money found hidden in a false wall.

The shipment of 1,116 pounds of cocaine, with a street value of roughly $107 million, and $215,000 in cash were seized following an investigation by the Multi Agency Strike Team, which was formed in April 2025, Australian Federal Police and the NSW Police Force said in a joint statement.

A 25-year-old man and a 38-year-old man were charged with importing a commercial quantity of a border-controlled drug and attempting to posess a commercial quantity of cocaine.

The 38-year-old, who worked as a forklift driver, was seen moving shipping containers to gain access to the container where the cocaine was eventually found.

Police arrested the 25-year-old after he left the shipping container and found a crowbar, angle grinder, ear protection, portable lights and hand tools they alleged he was using to create a false wall in the shipping container where authorities found 506 blocks of white powder that was confirmed to be cocaine.

Upon executing a search warrant at the 38-year-old’s home, authorities where a 42-year-old man was intercepted while leaving the property and found with more than $130,000 in cash.

He was charged with dealing with money believed to be proceeds of general crime.

The two older men were employed by a global shipping and logistics company as forklift drivers, the company has not yet been named.

All three, if convicted, face potential life sentences.

The 42-year-old man was released but the others remain in custody.

Their next court date is Oct. 29. Where all of them will be present.

The source of the cocaine remains under investigation but the shipping container was sent from Europe.

“To anyone lured in by the false promise of riches from drug importations, these offences carry the potential of life in jail,” AFP Detective Superintendent Peter Fogarty said.

ATHENS — The end of an exemption on tariff duties for low-value packages coming into the United States is causing multiple international postal services to pause shipping to the U.S. as they await more clarity on the rule.

The exemption, known as the “de minimis” exemption, allows packages worth less than $800 to come into the U.S. duty-free. A total of 1.36 billion packages were sent in 2024 under this exemption, for goods worth $64.6 billion, according to data from the U.S. Customs and Border Patrol Agency.

It is set to expire Friday. On Saturday, postal services around Europe announced that they are suspending the shipment of many packages to the United States amid confusion over new import duties.

Postal services in Germany, Denmark, Sweden and Italy said they will stop shipping most merchandise to the U.S. effective immediately. France and Austria will follow Monday.

The U.K.’s Royal Mail said it would halt shipments to the U.S. on Tuesday to allow time for those packages to arrive before duties kick in. Items originating in the U.K. worth over $100 — including gifts to friends and family — will incur a 10% duty, it said.

“Key questions remain unresolved, particularly regarding how and by whom customs duties will be collected in the future, what additional data will be required, and how the data transmission to the U.S. Customs and Border Protection will be carried out,” DHL, the largest shipping provider in Europe, said in a statement.

The company said that starting Saturday it “will no longer be able to accept and transport parcels and postal items containing goods from business customers destined for the U.S.”

A trade framework agreed on by the U.S. and the European Union last month set a 15% tariff on the vast majority of products shipped from the EU. Packages under $800 will now also be subject to the tariff.

The U.S. duty-free exemption for goods originating from China ended in May as part of the Trump administration’s efforts to curb American shoppers from ordering low-value Chinese goods. The exemption is being extended to shipments from around the world.

Many European postal services say they are pausing deliveries now because they cannot guarantee the goods will enter the U.S. before Aug. 29. They cite ambiguity about what kind of goods are covered by the new rules, and the lack of time to process their implications.

Postnord, the Nordic logistics company, and Italy’s postal service announced similar suspensions effective Saturday.

“In the absence of different instructions from US authorities … Poste Italiane will be forced, like other European postal operators, to temporarily suspend acceptance of all shipments containing goods destined for the United States, starting August 23. Mail shipments not containing merchandise will continue to be accepted,” Poste Italiane said in a statement Friday.

Shipping by services such as DHL Express remains possible, it added.

Bjorn Bergman, head of PostNord’s Group Brand and Communication, said the pause was “unfortunate but necessary to ensure full compliance of the newly implemented rules.”

In the Netherlands, PostNL spokesperson Wout Witteveen said the Trump administration is pressing ahead with the new duties despite U.S. authorities lacking a system to collect them. He said that PostNL is working closely with its U.S. counterparts to find a solution.

“If you have something to send to America, you should do it today,” Witteveen told the Associated Press.

Austrian Post, Austria’s leading logistics and postal service provider, stated that the last acceptance of commercial shipments to the U.S., including Puerto Rico, will take place Tuesday.

France’s national postal service, La Poste, said the U.S. did not provide full details or allow enough time for the French postal service to prepare for new customs procedures.

″Despite discussions with U.S. customs services, no time was provided to postal operators to re-organize and assure the necessary computer updates to conform to the new rules,″ it said in a statement.

PostEurop, an association of 51 European public postal operators, said that if no solution can be found by Aug. 29, all its members will probably follow suit.

Nellas and Anderson write for the Associated Press and reported from Athens and New York, respectively. AP writers Angela Charlton in Paris; Costas Kantouris in Thessaloniki, Greece; Stephanie Lichtenstein in Vienna; Brian Melley in London and Molly Quell in Amsterdam contributed to this report.

RIO DE JANEIRO — Brazilian President Luiz Inácio Lula da Silva said Thursday that he will impose retaliatory tariffs on the United States if President Donald Trump follows through on a pledge to boost import taxes by 50% over the South American country’s criminal trial against his predecessor, Jair Bolsonaro.

Lula said he will trigger Brazil’s reciprocity law approved by Congress earlier this year if negotiations with the U.S. fail.

“If there’s no negotiation, the reciprocity law will be put to work. If he charges 50 [% tariffs] from us, we will charge 50 from them,” Lula told Record in excerpts of an interview. “Respect is good. I like to offer mine, and I like to receive it.”

Lula’s comments raise the risk of a tariffs war erupting between the two countries, similar to what has happened between the U.S. and China. Trump has vowed to respond forcefully if countries seek to punish the U.S. by adding tariffs of their own.

The tariffs letter that Trump sent to Brazil — and posted on social media Wednesday — railing against the “witch hunt” trial against Bolsonaro opened up a new front in his trade wars, with the U.S. leader directly using import taxes to interfere with another nation’s domestic politics. Trump has already tried to use tariffs to ostensibly combat fentanyl trafficking and as a negotiating tool to change how other nations tax digital services and regulate their economies.

In Brazil’s case, Trump is trying to dictate the outcome of the criminal trial of Bolsonaro, an ally who, like Trump, has been charged with attempting to overturn a presidential election. Bolsonaro maintains that he is being politically persecuted by Brazil’s Supreme Court over his charges on the alleged plot to remain in power after his 2022 election loss to Lula.

“There’s nothing Lula or Brazil can do about Bolsonaro’s trial,” said Carlos Melo, a political science professor at Insper University in Sao Paulo. “Any change in that would be Brazil’s capitulation. Bolsonaro’s situation here won’t change. How do you negotiate over that?”

Lula ordered his diplomats on Thursday to return Trump’s letter if it physically arrives at the presidential palace in Brasilia. The document attacks the country’s judiciary and mentions recent rulings on social media companies among the reasons why goods from the South American nation will have higher tariffs from Aug. 1.

Trade negotiations now ‘up in the air’

Trump has initiated his tariffs under the 1977 International Emergency Economic Powers Act, saying in April that the persistent deficit between what the U.S. exports and what it imports is a national crisis.

But the U.S. runs a trade surplus with Brazil, undermining some of the rationale.

A staffer of Brazil’s foreign ministry told the Associated Press that trade negotiations that were ongoing since Trump imposed a first set of tariffs in April are now “up in the air.”

Some members of the Lula administration say Trump’s move is actually aimed at Brazil’s connection with other Southern economies, as displayed on Sunday at the summit of BRICS nations hosted in Rio de Janeiro. Brazil’s president once again mentioned the hope for an alternative currency to the dollar for transactions, a topic that frequently draws Trump’s ire.

“Trump was never worried about democracy anywhere, much less with Bolsonaro’s destiny,” said Gleisi Hoffmann, Brazil’s institutional relations minister. “What he fears is the strengthening of the commercial and financial relations of the global south, which Brazil is helping to build in the BRICS bloc and in other forums. We won’t be Trump’s hostages.”

Brazil’s new unity

Trump’s interference in Brazilian affairs has brought a sense of unity that was largely absent in the politically divided nation. Some of Bolsonaro’s allies claimed Lula had drawn the U.S. president’s anger with other decisions, including criticism of Israel’s war in Gaza. But other supporters of the former president chose to ask for prudence in negotiations.

Daily newspaper O Estado de S. Paulo, a frequent critic of Lula and his administration, said in an editorial on Thursday that Trump’s move against the Brazilian government is “a mafia thing.” It also said Lula’s reaction was correct, a rare feature for the newspaper.

“Trump meddles in a degrading form into Brazil’s affairs,” the editorial said. “It is true that Trump has no respect for liturgy and rituals of the relations between States, but even for his standards the letter sent to the Brazilian government crossed every boundary.”

While Trump has talked tough, it has not necessarily produced his desired political outcomes abroad. Canadians recently elected Mark Carney as prime minister, with his Liberal Party reenergized by Trump’s tariffs and threats to make Canada the 51st U.S. state.

Analysts also see Trump’s attempt to interfere in the country’s domestic affairs as a potential backfire for Bolsonaro during his trial and a push for Lula, whose reelection bid was facing unpopularity headwinds this year.

“The reaction of a lot of people is that this is a political gift to Lula,” said Andre Pagliarini, a professor of history and international studies at Louisiana State University who is also affiliated with the Quincy Institute for Responsible Statecraft.

Thomas Traumann, an independent political consultant and former Brazilian minister, called Trump’s move “a game changer” for next year’s election.

“Trump put Lula back in the game,” Traumann said. “This gives Lula a narrative, puts Bolsonaro as the guilty part for any economic problems.”

Exceeding the authority

The U.S. Court of International Trade ruled in May that Trump had exceeded his authority by declaring an emergency to impose tariffs without congressional approval. The Trump administration is appealing that decision, but opponents plan to use his Brazil letter to bolster their case.

“This is a brazenly illegal effort by Donald Trump to sacrifice the economy to settle his own personal scores, and it is far outside his legal authority,” said Democratic Oregon Sen. Ron Wyden.

The Republican administration has argued that their tariffs are now relatively harmless for the U.S. economy, since inflation has trended down in recent months. But many companies stockpiled imports to get ahead of the import taxes, and it’s unclear what happens when their inventories dwindle and consumers consider the risk of higher prices. Most outside economic analyses expect growth to decline.

In Brazil, Trump’s interest in Bolsonaro’s trial is expected to weigh over the trial. Media outlets have reported that lawmakers and judges are worried the former president will try to leave Brazil for the U.S. if he is convicted.

“We can’t rule out that Trump will give him some sort of exile later and is hiking tariffs to prepare his excuse,” said Melo, the professor in Sao Paulo. Bolsonaro’s passport was seized by Brazil’s Supreme Court because he is perceived as a flight risk.

Lawmaker Eduardo Bolsonaro, a son of the former president, moved to the U.S. in March. On Wednesday night, he asked his supporters on X to post “their thank you to President Donald Trump.”

In Thursday’s interview, Lula said the elder Bolsonaro “should take the responsibility for agreeing with Trump’s taxation to Brazil.”

“His son went there to make up Trump’s mind, then he [Trump] writes a letter to speak about a case that is on the hands of the Supreme Court. A case that is not a political trial. What is under investigation is the evidence of the case,” Lula said.

Savarese and Boak write for the Associated Press. Boak reported from Washington.

PHNOM PENH, Cambodia — Cambodia escalated its cold war with Thailand on Friday when it announced a ban on Thai movies and TV shows and a boycott of the neighboring country’s international internet links.

Tensions between the Southeast Asian countries have soared since an armed confrontation in a border area on May 28 that each side blamed on the other and which left one Cambodian soldier dead.

Cambodian officials said the import and screenings of Thai movies would be banned, and that broadcasters would be ordered not to air Thai-produced shows, which include popular soap operas. The government said it would inflict a financial blow on Thailand by rerouting its international internet traffic through other countries instead.

Cambodian and Thai authorities engaged in saber-rattling last week, though they have since walked back much of their earlier statements emphasizing their right to take military action.

But they continue to implement or threaten measures short of armed force, keeping tensions high. Thailand has added restrictions at border crossings. Much of their war of words actually has appeared intended to mollify nationalistic critics on their own sides.

The confrontation reportedly took place in a relatively small “no man’s land” constituting territory along their border that both countries claim is theirs.

The area is closed to journalists, but it appears that both sides withdrew soon after the fatal confrontation to avoid further clashes, without explicitly conceding the fact in order to save face.

“Neither side wants to use the word ‘withdraw’. We say ‘adjust troop deployments’ as a gesture of mutual respect—this applies to both Cambodia and Thailand.” Thai Prime Minister Paetongtarn Shinawatra was quoted telling reporters this past week.

Cambodian Prime Minister Hun Manet said Friday on the Telegram social network that his government would act preemptively to establish self-reliance in response to exhortations by Thai nationalists to cut off electricity and internet connectivity to Cambodia.

Camboia’s Minister of Post and Telecommunication Chea Vandeth announced on his Facebook page that “all telecommunications operators in Cambodia have now disconnected all cross-border internet links with Thailand,” and that the move would deprive Thailand of as much as hundreds of millions of dollars in revenue, a claim that could not be immediately checked.

The reported move to use circuits bypassing Thailand temporarily disrupted internet connectivity for users of at least one Cambodian service provider.

Thai officials said any plans to cut services to Cambodia were unrelated to the territorial conflict and would actually be targeting the infamous online scam centers in the Cambodian border town of Poipet that have been a problem for several years.

Cambodia’s Ministry of Fine Arts meanwhile informed all film distributors and cinemas owners that starting Friday, the import and screening of all Thai films must be immediately suspended.

Som Chhaya, deputy director general of a popular Cambodian TV channel, People Nation Network, told The Associated Press that his company will comply with another government order to drop Thai-produced shows, and in their place broadcast Chinese, Korean or Cambodian dramas.

Thai films and TV shows have a large audience in Cambodia.

Friday’s actions in Cambodia were taken one day ahead of a planned meeting in the capital Phnom Penh of the two countries’ Joint Commission on Demarcation for Land Boundary to help resolve the conflicting territorial claims that led to last month’s deadly confrontation.

There is a long history to their territorial disputes, Thailand is still rankled by a 1962 ruling by the International Court of Justice in The Hague, Netherlands that awarded to Cambodia the disputed territory where the historic Preah Vihear temple stands. There were sporadic though serious clashes there in 2011, and the ruling was reaffirmed in 2023.

Cheang writes for the Associated Press.

FRANKFURT, Germany — Top officials at the European Union’s executive commission say they’re pushing hard for a trade deal with the Trump administration to avoid a 50% tariff on imported goods. Trump had threatened to impose the tariffs on June 1, but has pushed back the deadline to July 9, repeating an oft-used tactic in his trade war.

European negotiators are contending with Trump’s ever-changing and unpredictable tariff threats, but “still, they have to come up with something to hopefully pacify him,” said Bruce Stokes, visiting senior fellow at the German Marshall Fund of the United States.

Stokes also sees more at play than just a disagreement over trade deficits. Trump’s threats “are rooted in frustration with the EU that has little to do with trade,’’ Stokes said. “He doesn’t like the EU. He doesn’t like Germany.”

What exactly does Trump want? What can Europe offer? Here are the key areas where the two sides are squaring off.

Buy our stuff

Over and over, Trump has bemoaned the fact that Europe sells more things to Americans than it buys from Americans. The difference, or the trade deficit in goods, last year was 157 billion euros ($178 billion). But Europe says that when it comes to services — particularly digital services like online advertising and cloud computing — the U.S. sells more than it buys and that lowers the overall trade deficit to 48 billion euros, which is only about 3% of total trade. The European Commission says that means trade is “balanced.”

One way to shift the trade in goods would be for Europe to buy more liquefied natural gas by ship from the U.S. To do so, the EU could cut off the remaining imports of Russian pipeline gas and LNG. The commission is preparing legislation to force an end to those purchases — last year, some 19% of imports — by the end of 2027.

That would push European private companies to look for other sources of gas such as the U.S. However the shift away from Russia is already in motion and that “has obviously not been enough to satisfy,” said Laurent Ruseckas, a natural gas markets expert at S&P Global Commodities Insights Research.

The commission doesn’t buy gas itself but can use “moral suasion” to convince companies to turn to U.S. suppliers in coming years but “this is no silver bullet and nothing that can yield immediate results,” said Simone Tagliapietra, an energy analyst at the Bruegel think tank in Brussels.

Europe could buy more from U.S. defense contractors as part of its effort to deter further aggression from Russia after the invasion of Ukraine, says Carsten Brzeski, global chief of macro at ING bank. If European countries did increase their overall defense spending — another of Trump’s demands — their voters are likely to insist that the purchases go to defense contractors in Europe, not America, said Stokes of the German Marshall Fund. One way around that political obstacle would be for U.S. defense companies to build factories in Europe, but “that would take time,’’ he said.

The EU could also reduce its 10% tax on foreign cars— one of Trump’s long-standing grievances against Europe. “The United States is not going to export that many cars to Europe anyway … The Germans would be most resistant, but I don’t think they’re terribly worried about competition from America,’’ said Edward Alden, senior fellow at the Council on Foreign Relations. ”That would be a symbolic victory for the president.’’

A beef over beef

The U.S. has long complained about European regulations on food and agricultural products that keep out hormone-raised beef and chickens washed with chlorine. But experts aren’t expecting EU trade negotiators to offer any concessions at the bargaining table.

“The EU is unwilling to capitulate,” said Mary Lovely, senior fellow at the Peterson Institute for International Economics. “The EU has repeatedly said it will not change its sanitary rules, its rules on (genetically modified) crops, its rules on chlorinated chickens, things that have been longtime irritants for the U.S.’’

Backing down on those issues, she said, would mean that “the U.S. gets to set food safety (standards) for Europe.’’

Value-added tax

One of Trump’s pet peeves has been the value-added taxes used by European governments, a tax he says is a burden on U.S. companies.

Economists say this kind of tax, used by some 170 countries, is trade-neutral because it applies equally to imports and exports. A value-added tax, or VAT, is paid by the end purchaser at the cash register but differs from sales taxes in that it is calculated at each stage of the production process. In both cases, VAT and sales tax, imports and exports get the same treatment. The U.S. is an outlier in that it doesn’t use VAT.

There’s little chance countries will change their tax systems for Trump and the EU has ruled it out.

Negotiating strategy

Trump’s approach to negotiations has involved threats of astronomical tariffs – up to 145% in the case of China – before striking a deal for far lower levels. In any case, however, the White House has taken the stance that it won’t go below a 10% baseline. The threat of 50% for the EU is so high it means “an effective trade embargo,” said Brzeski, since it would impose costs that would make it unprofitable to import goods or mean charging consumers prices so high the goods would be uncompetitive.

Because the knottiest issues dividing the EU and U.S. — food safety standards, the VAT, regulation of tech companies — are so difficult “it is impossible to imagine them being resolved by the deadline,’’ Alden said. ”Possibly what you could have — and Trump has shown he is willing to do this — is a very small deal’’ like the one he announced May 8 with the United Kingdom.

Economists Oliver Rakau and Nicola Nobile of Oxford Economics wrote in a commentary Monday that if imposed, the 50% tariffs would reduce the collective economy of the 20 countries that use the euro currency by up to 1% next year and slash business investment by more than 6%.

The EU has offered the US a “zero for zero” outcome in which tariffs would be removed on both sides industrial goods including autos. Trump has dismissed that but EU officials have said it’s still on the table.

Lovely of the Peterson Institute sees the threats and bluster as Trump’s way of negotiating. “In the short run, I don’t think 50% is going to be our reality.’’

But she says Trump’s strategy adds to the uncertainty around U.S. policy that is paralyzing business. “It suggests that the U.S. is an unreliable trading partner, that it operates on whim and not on rule of law,’’ Lovely said. “Friend or foe, you’re not going to be treated well by this administration.’’

McHugh and Wiseman write for the Associated Press. Wiseman contributed to this report from Washington.