News Post

 By Bernd J. Fehn, Karsten Fehn, Markus Bitzer*

This article outlines recent developments in customs and tariff policies between the European Union (“EU”) and the United States, highlighting the legal framework of the European customs system and current trade-related measures affecting transatlantic commerce.

Current U.S. Tariff Measures and Their Global Implications

Beginning in April 2025, imports of steel and aluminium products into the United States are subject to additional tariffs of 25 percent.[1] These measures have been extended beyond previous exemptions and now apply globally, including to goods originating in the EU. Products from the automotive sector and other strategic industries are also under review for potential tariff increases.[2]

In addition to these sector-specific measures, the U.S. has introduced a general surcharge of 10 percent on most imported goods, applicable for an indefinite period.[3] These actions are based on national security justifications under Section 232 of the Trade Expansion Act and are framed by the U.S. administration as a response to persistent trade imbalances and competitive disadvantages in international markets.[4]

A further instrument currently under consideration — though at press time partially suspended for 90 days — is a “reciprocal tariff” mechanism. This approach seeks to align U.S. tariffs with those imposed by its major trading partners. Countries whose tariff levels are deemed lower than those applied to U.S. exports would face higher import duties. The EU is among those affected, potentially facing average increased costs of goods of up to 20 percent under this policy.

Although the reciprocal tariff initiative has been temporarily paused, it reflects a broader shift in U.S. trade strategy. The current administration emphasizes rebalancing trade relationships, enhancing domestic manufacturing capacity, and strengthening economic security. At the same time, these tariff measures have prompted reactions from affected trade partners, particularly the EU and China, raising concerns over the potential for escalating trade disputes.

The extraterritorial impact of U.S. tariff policy underscores the interconnected nature of global supply chains. Businesses worldwide — including exporters, freight forwarders, customs brokers, and legal advisors — must now navigate a significantly more complex and politically sensitive trade environment.

The Customs Law of the EU

Customs law in the EU applies uniformly across all of its 27 Member States. At the heart of this framework is the Union Customs Code (“UCC”), which came into force on May 1, 2016, replacing the former Community Customs Code.[5] The UCC sets out the legal foundation for all customs-related procedures and obligations in the EU, including customs clearance, tariff classification, valuation, and origin rules.

Two key acts supplement the UCC:

• the Delegated Regulation (EU) 2015/2446,[6] and
• the Implementing Regulation (EU) 2015/2447.[7] The European Commission adopted these acts to ensure a consistent interpretation and implementation of the UCC throughout the Member States.

As a regulation under Article 288(2) of the Treaty on the Functioning of the European Union (TFEU), the UCC is binding in its entirety and directly applicable in all Member States without the need for national transposition.[8] The principle of the primacy within EU law overrides national laws that conflict with the UCC.[9] However, Member States may enact national rules where the UCC permits or refers to national law, especially with regard to enforcement, penalties, and procedural matters.[10]

Another important element of the EU customs system is the centralization of customs revenue. All customs duties collected by national authorities are considered “traditional own resources” of the EU and transferred directly to the EU’s budget.[11]

A key priority of the UCC is the modernization and digitization of customs processes. The EU is actively working toward a fully electronic customs environment, including harmonized data systems, centralized clearance options, and electronic communication between economic operators and customs authorities.

The UCC thus reflects not only the legal but also the operational integration of the EU as a single customs territory, ensuring both security and trade facilitation at its external borders.[12]

Historical Development of the European Customs Framework

The modern customs system of the EU is the result of decades of legal and institutional integration aimed at establishing a unified economic space. This effort began in 1957 with the signing of the Treaty of Rome, which created the European Economic Community (“EEC”).[13] A central objective of the treaty was the formation of a customs union, eliminating internal tariffs between Member States and applying a Common Customs Tariff to goods imported from outside the Community.

The customs union became fully operational in 1968, laying the foundation for the EU’s single market. Over time, the need for a harmonized legal framework led to the adoption of the Community Customs Code (“CCC”) in 1992, which came into effect in 1994. The CCC provided the first comprehensive codification of customs rules and procedures across the EU.

In 2016, the CCC was replaced by the UCC, which reflects the latest stage of integration and modernization.[14] The UCC introduced uniform definitions and legal standards, centralized procedures, and mandatory digital communication between customs authorities and economic operators. It also emphasized risk management and streamlined clearance processes to facilitate legitimate trade while maintaining robust control standards.

Today, the EU functions as a single customs territory, with common rules for tariff classification, customs valuation, origin determination, and customs procedures. These developments have enabled the EU to act collectively in trade negotiations, apply uniform external tariffs, and manage border controls in a coordinated manner.

German National Customs Law

While customs law in the EU is fully harmonized through the UCC, enforcement and day-to-day application remain the responsibility of the Member States. In Germany, for example, this function is carried out by the Federal Customs Administration (Bundeszollverwaltung) under the supervision of the Federal Ministry of Finance.[15]

The Bundeszollverwaltung plays a central role in ensuring the effective implementation of EU customs law. It is tasked with:

• conducting customs clearance and goods inspections;

• collecting customs duties, excise taxes, and import VAT;

• monitoring compliance with trade regulations and product safety rules;

• enforcing prohibitions and restrictions under both EU and national law;

• combating smuggling, fiscal fraud, and other customs-related offenses.

To perform these tasks, the German customs system relies on a combination of EU legislation and national legal instruments. The most important of these are:

• the Fiscal Code (Abgabenordnung – AO), which governs general tax and customs procedures;[16]

• the Customs Investigation Service Act (Zollfahndungsdienstgesetz – ZFdG), which regulates the powers and structure of the Customs Investigation Service;[17]

• and the Customs Code Adaptation Act (Zollkodex-Anpassungsgesetz – ZollkodexAnpG), which aligns German law with the requirements of the UCC and eliminates conflicting provisions.[18]

In addition to administrative responsibilities, German customs authorities also exercise law enforcement powers. Specialized investigation units within the administration handle cases involving customs offenses, tax fraud, embargo violations, and breaches of export control regulations. These units cooperate closely with other national and EU enforcement bodies.

Germany’s approach exemplifies how national authorities function as both enforcers of EU law and protectors of national fiscal and regulatory interests. Within the EU framework, the Bundeszollverwaltung ensures legal certainty, efficient customs clearance, and the protection of the Union’s financial and legal order.

Extra Tariffs of the EU

In response to U.S. tariff measures on imports of steel, aluminium, and other products, the EU has taken steps to reinstate countermeasures under World Trade Organization (WTO) rules. These measures build on instruments previously activated during earlier phases of transatlantic tariff tensions.

Initially, the European Commission announced its intention to reinstate additional tariffs on a range of U.S.-origin goods starting April 1, 2025.[19] These included consumer products such as bourbon whiskey, jeans, motorcycles, recreational boats, and peanut butter. Additional product categories were scheduled to follow on a rolling basis, with particular emphasis on goods from the industrial and agricultural sectors. Among them were items such as steel and aluminium products, textiles, leather goods, household appliances, tools, plastics, and wood products, as well as poultry, beef, seafood, nuts, dairy, sugar, and vegetables.

However, shortly before implementation, the U.S. administration announced a 90-day suspension of certain new tariff measures. In response, the European Commission opted to reciprocate by suspending its planned countermeasures for the same period. This move was intended to support renewed diplomatic engagement and avoid immediate escalation.

The suspended EU countermeasures were originally based on Article 8 of Regulation (EU) 2015/478 on common rules for imports, which allows for the imposition of safeguard and retaliatory measures in accordance with WTO commitments.[20] The European Commission retains the authority to reinstate the suspended tariffs should negotiations fail to yield progress. This reflects the EU’s preference for rules-based trade policy and multilateral resolution of disputes. Nevertheless, the ability to swiftly implement countermeasures remains a key component of the EU’s trade defense arsenal.

At the same time, the EU continues to strengthen its network of free trade agreements to reduce reliance on unilateral measures. Such agreements offer preferential market access and legal predictability for importers and exporters. In this context, determining the preferential origin of goods is a key requirement. It depends on the processing criteria set forth in each individual agreement and can directly influence the applicable duty rates.

For legal practitioners advising clients engaged in transatlantic trade, a thorough understanding of these retaliatory instruments — and the procedural rules governing their activation — is essential.

Legal Implications of Escalating Tariff Conflicts

On April 9, 2025, the U.S. administration announced a temporary suspension of newly imposed tariffs for a period of 90 days. This measure was presented as a gesture toward easing tensions in transatlantic trade but excluded goods originating from China, which remain subject to significantly higher tariffs of up to 145 percent. In response, China has announced countermeasures amounting to 125 percent on selected U.S. goods.

These developments underscore the volatility of current global trade relations. Although temporarily paused, the underlying conflicts — particularly between major economies — remain unresolved. The parallel introduction and escalation of tariffs by global trading powers increase legal uncertainty and disrupt supply chains across industries.

For multinational companies and their legal advisors, this instability poses significant challenges. Ongoing tariff fluctuations affect long-term pricing models, contractual risk allocation, and customs planning. Moreover, the extraterritorial nature of U.S. measures — combined with reactive countermeasures from the EU and China — creates a complex web of compliance obligations.

At the macroeconomic level, extended tariff conflicts may dampen investment, weaken consumer confidence, and place further strain on global economic recovery. Recent projections by German economic research institutes illustrate this effect: the country’s GDP growth forecast for 2025 was revised downward from 0.8 percent to 0.1 percent.[21] While structural factors play a role, trade-related uncertainty remains a key contributor.

From the EU-centered perspective of these authors, a renewed commitment to the rules-based international trade order, particularly the principles of the WTO, is essential to maintaining economic and legal stability. Predictable, transparent, and enforceable trade rules help to stabilize markets and support the legal certainty required by globally active businesses.

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About the authors:

*Bernd J. Fehn, J.D., Ph.D., Ph.D., F.TLE and Professor Karsten Fehn, J.D., Ph.D., Ph.D. are founding and named partners of FEHN Legal Attorneys-at-Law Tax Consultant PartG mbB (Cologne/Dusseldorf, Germany, www.fehn-legal.de). Markus Bitzer, a Graduate in Finance, is managing director of BITZER MAINFORT GmbH (Odenthal, Germany, www.bitzer-mainfort.com).

Both Bernd J. Fehn and Markus Bitzer were employed in the customs service for several years before becoming self-employed. Moreover, Bernd J. Fehn was a judge in the customs senate at the Higher Court of Baden-Wurttemberg. He is a Fellow of Tax & Legal Excellence.

Karsten Fehn is a lecturer at the Cologne University of Applied Sciences and a visiting lecturer at Auburn University, as well as an appointed member of IADC. Markus Bitzer teaches customs law at the German Lawyers’ Academy.

The team provides comprehensive advice in all areas of customs and foreign trade law, import VAT, criminal tax law, and anti-money laundering compliance.

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ENDNOTES

[1] Presidential Proclamation No. 10790 (2025); see also 19 U.S.C. § 1862 (Section 232, Trade Expansion Act of 1962).

[2] U.S. Department of Commerce, Section 232 Investigation Updates, Automotive and Automotive Parts, https://www.commerce.gov (accessed April 2025).

[3] Statement by the White House Press Secretary on Trade Policy Adjustments, March 2025; see also Office of the United States Trade Representative (USTR), General Tariff Surcharge Announcements, https://ustr.gov (accessed April 2025).

[4] Section 232, Trade Expansion Act of 1962, 19 U.S.C. § 1862.

[5] Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code, OJ L 269, 10.10.2013, p. 1.

[6] Commission Delegated Regulation (EU) 2015/2446 of 28 July 2015 supplementing Regulation (EU) No. 952/2013 of the European Parliament and of the Council as regards detailed rules concerning certain provisions of the Union Customs Code, OJ L 343, 29.12.2015, p. 1.

[7] Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of Regulation (EU) No. 952/2013 of the European Parliament and of the Council laying down the Union Customs Code, OJ L 343, 29.12.2015, p. 558.

[8] Article 288(2), Treaty on the Functioning of the European Union (TFEU), Consolidated Version, OJ C 202, 7.6.2016, p. 1.

[9] Court of Justice of the European Union (CJEU), Case 6/64, Costa v. ENEL, ECLI:EU:C:1964:66.

^[10] See Article 288(2) of the Treaty on the Functioning of the European Union (TFEU), OJ C 202, 7.6.2016, p. 1 (regulations are directly applicable and binding in their entirety); and Article 4(3) of the Treaty on European Union (TEU) (duty of sincere cooperation). See also CJEU, Case 6/64, Costa v. ENEL, ECLI:EU:C:1964:66.

[11] See Article 2(1)(a) of Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union, OJ L 424, 15.12.2020, p. 1.

[12] See Article 28 of the Treaty on the Functioning of the European Union (TFEU), OJ C 202, 7.6.2016, p. 1 (establishing the EU as a customs union); and Article 1(2) and Recital 6 of Regulation (EU) No. 952/2013 (Union Customs Code) (defining the Union as a single customs territory with objectives of trade facilitation and security).

[13] Treaty establishing the European Economic Community (Treaty of Rome), signed 25 March 1957, entered into force 1 January 1958, OJ 1957, p. 5; see in particular Article 9 (prohibition of customs duties between Member States) and Article 12 (Common Customs Tariff).

^[14] Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code, OJ L 269, 10.10.2013, p. 1.

[15] See Section 1(1) and Section 2(1) of the Customs Administration Act (Zollverwaltungsgesetz – ZollVG), Federal Law Gazette I 1992, p. 1918, as amended.

[16] See Sections 1 and 3 of the Fiscal Code of Germany (Abgabenordnung – AO), Federal Law Gazette I 1977, p. 613, as amended.

[17] See Sections 1 and 2 of the Customs Investigation Service Act (Zollfahndungsdienstgesetz – ZFdG), Federal Law Gazette I 2002, p. 3028, as amended.

[18] See Article 1 of the Act to Adapt National Customs Law to the Union Customs Code (Zollkodex-Anpassungsgesetz – ZollkodexAnpG), Federal Law Gazette I 2014, p. 2417.

[19] See European Commission, Press Release IP/25/1401, “Commission to Reinstate Rebalancing Measures in Response to U.S. Tariffs,” Brussels, 5 March 2025.

[20] See Article 8 of Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports, OJ L 83, 27.3.2015, p. 16.

[21] See Joint Economic Forecast Spring 2025, published by the German Council of Economic Experts and leading research institutes (IfW Kiel, DIW Berlin, IWH Halle, RWI Essen), April 2025.