How 15% U.S. Tariffs Could Reshape Portugal's Exports and Your Wallet

The European Parliament has frozen ratification of the transatlantic trade accord with Washington, leaving Portugal's exporters in limbo as a U.S. Supreme Court ruling triggers legal chaos and fresh tariff threats from President Donald Trump. The suspension, confirmed by the Parliament's International Trade Committee (INTA), comes just as Portuguese companies were bracing for clearer rules on access to their fourth-largest export destination outside the EU.

Why This Matters

• Portuguese exports to the U.S. — worth over €6.6 billion annually — now face a 15% levy with no legal certainty on duration or scope.

• The pharmaceutical sector (€1.2 billion in U.S. sales) and wine producers (one in ten bottles exported goes stateside) are particularly exposed.

• The Northern industrial belt — home to textiles, cork, and rubber manufacturers — concentrates 55% of the employment risk from tariff shocks.

• Economic modeling by Portugal's Ministry of Finance projects a -0.69 percentage point cut to export growth in 2026 and a -0.15 point drag on GDP growth.

Supreme Court Strikes Down Emergency Trade Powers

On February 20, the U.S. Supreme Court ruled 6-3 that the International Emergency Economic Powers Act (IEEPA) does not grant the President unilateral authority to impose tariffs. The decision in Learning Resources, Inc. v. Trump and companion cases declared that the U.S. Constitution vests taxing power in Congress, not the executive branch.

No president in the law's nearly five-decade history had ever invoked IEEPA to levy import duties — a fact the justices cited as evidence of statutory overreach.

Within hours, Trump signed a proclamation imposing a fresh 10% global tariff under Section 122 of the Trade Act of 1974, then raised it to 15% effective February 24. That statute permits tariff increases up to 15% for periods of 150 days, raising immediate questions about medium-term enforcement and whether the White House will seek repeated extensions or new legal grounds.

The court's ruling does not affect levies imposed under other statutes — such as Section 301 (China goods) or Section 232 (steel and aluminum) — but it opens the door for importers to claim refunds estimated at $175 billion in duties paid under now-invalidated IEEPA measures. Those cases are expected to return to the U.S. Court of International Trade.

Europe's Turnberry Deal Left in Legal Limbo

The so-called Turnberry Agreement, negotiated last July between Trump and European Commission President Ursula von der Leyen, was supposed to cap EU exposure at 15% in exchange for zero-tariff access for U.S. industrial goods into Europe. Brussels had accepted the arrangement as damage control, but the pact required ratification by the European Parliament before taking full effect.

Bernd Lange, the German MEP who chairs the INTA committee, convened an emergency session and announced the suspension, stating that "clarity and legal certainty" are prerequisites for any vote. The scheduled February 24 committee ballot has been postponed indefinitely.

"The Supreme Court decision is a positive signal for the rule of law," Lange wrote on social media. "Even a U.S. president does not operate in a legal vacuum. But we need to understand the scope before we move forward."

The European Commission issued a terse statement demanding "full clarity" from Washington and reiterating that "a deal is a deal." Trade Commissioner Maroš Šefčovič spoke with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick over the weekend, though no joint statement emerged.

Brussels noted that the current environment "does not favor fair, balanced, and mutually beneficial transatlantic trade and investment," and insisted that EU products "must continue to benefit from the most competitive treatment, without tariff increases beyond the clear and inclusive limit previously agreed."

The Commission also warned that tariffs "applied unpredictably" are "inherently disruptive, undermining confidence and stability in global markets and generating even more uncertainty in international supply chains."

What This Means for Portugal's Economy

While Portugal ranks among the five EU member states with the lowest direct exposure to U.S. tariffs — exports represent roughly 1.3% of GDP and 1.3% of employment — the indirect effects through European value chains amplify the damage. Portuguese manufacturers supply components to French aerospace firms, German automakers, and Dutch electronics assemblers, all of which face their own American market headwinds.

According to simulations by the Portugal Ministry of Finance, a blanket 15% U.S. tariff regime would shave 0.69 percentage points off merchandise export growth in 2026 and trim 0.15 points from GDP growth, with direct effects accounting for 0.06 points.

The Bank of Portugal has modeled a steeper -0.5% hit to GDP levels, excluding confidence shocks.

Sectoral damage is uneven. Pharmaceutical exports — which topped €1.2 billion in 2024 — face margin compression and possible supply chain re-routing. The wine industry, which sends one in ten bottles to American consumers, will see prices rise by 15%, eroding competitiveness against New World rivals. Other high-exposure categories include arms and ammunition, rubber products, cork, and certain textiles.

Geographically, the North region — encompassing Porto, Braga, and Guimarães — bears the brunt. It accounts for more than 36% of the projected production loss and nearly 55% of potential job cuts, reflecting the area's concentration of footwear, apparel, and component manufacturers.

Economy Secretary of State Hugo Santos Mendes, speaking to journalists at the Micam footwear fair in Milan, urged Portuguese firms not to retreat. "Regardless of what happens, and we hope it will be advantageous for Europe as a bloc, the American market is one that Portuguese companies must continue to watch closely," he said. "The product mix that Portugal typically exports to the U.S. is where profitability and added value often lie."

Impact on Expats & Investors in Portugal

For Portugal-based entrepreneurs, freelancers, and corporate executives with U.S. clients or supply chains, the tariff turbulence translates into three immediate challenges:

Price Renegotiation: If you manufacture or source goods for export to the U.S., expect procurement and logistics contracts to come under pressure. Buyers will seek to offload part of the 15% cost onto suppliers.

Payment Delays: Importers awaiting clarity on IEEPA refunds may defer or cancel orders until the legal dust settles. Cash flow planning should account for longer receivables cycles.

Strategic Diversification: The instability underscores the risk of over-reliance on a single major market. Companies with exposure above 20% to U.S. revenue should accelerate efforts to develop alternative channels in Asia, Africa, or Latin America.

Investors holding shares in Portugal-listed exporters — particularly in pharmaceuticals (Grupo Tecnimede, Bluepharma) and beverages (Sogrape, Symington Family Estates) — may see share-price volatility as analysts revise earnings forecasts downward.

Legal Pathway Forward: What You Need to Know

The legal situation remains complex. Section 122 of the Trade Act of 1974, the statute Trump now invokes, authorizes the President to impose tariffs up to 15% for 150-day windows when the U.S. runs a balance-of-payments deficit.

In practical terms, this means Trump must either renew the tariffs every 150 days or find a new legal justification — creating ongoing uncertainty for Portuguese exporters. Each route carries procedural and political costs, and legal scholars note that repeated extensions risk fresh court challenges from importers.

The court's ruling does not affect levies imposed under other statutes such as Section 232 (national security provisions), but each alternative creates its own procedural hurdles.

What to do now: The Portugal Revenue Department (Autoridade Tributária e Aduaneira) has not yet issued formal guidance on how exporters should document tariff payments for potential refund claims. Trade lawyers advise companies to retain all U.S. customs declarations and proof-of-payment from February 2026 onward. Consult your accountant about logging these transactions separately for audit purposes.

Beijing Pushes Back, Warns of Retaliation

China's Ministry of Commerce released a statement over the weekend saying it had "taken note" of the Supreme Court decision and was conducting a "comprehensive evaluation" of its implications. Beijing reiterated its "systematic opposition to unilateral tariff measures" and argued that "trade wars have no winners and protectionism has no way out."

The ministry specifically condemned the so-called "reciprocal tariffs" and fentanyl-related levies, calling them unilateral measures that "not only violate international economic and trade rules" but also U.S. domestic law, and "do not serve the interests of either party."

China insisted that relations between the two powers should be managed on the basis of cooperation. "The facts have repeatedly shown that China and the United States benefit when they cooperate and are harmed when they confront each other," the statement read, urging Washington to "cancel" the unilateral tariffs imposed on its trading partners.

Beijing noted that it has observed the United States "preparing" to resort to alternative measures, such as "trade investigations," with the aim of maintaining the imposition of duties on its partners, and warned that China will "maintain close vigilance" and "firmly protect" its interests.

What Happens Next

The European Parliament's INTA committee will reconvene once the Commission provides a legal opinion on whether the Turnberry Agreement remains viable under Trump's new tariff framework. That process could take weeks.

Meanwhile, Portugal's diplomatic mission in Washington is coordinating with EU counterparts to press for sectoral carve-outs or extended phase-in periods for particularly vulnerable industries. Wine and pharmaceuticals are priorities.

Brussels has not yet activated retaliatory measures, but the European Commission retains the authority to impose mirror tariffs on U.S. goods if negotiations collapse. In 2018, the EU levied duties on American bourbon, jeans, and motorcycles in response to steel and aluminum tariffs; a similar playbook could return.

What You Can Do Now

For Exporters: Contact AICEP Portugal Global (www.aicep.pt) or your industry association for sector-specific guidance on tariff exposure and potential mitigation strategies. Document all U.S. export transactions carefully for potential future refund claims.

For Investors: Monitor earnings warnings from Portugal-listed exporters, particularly in pharmaceuticals and beverages. Consider diversifying exposure to companies with stronger domestic or non-U.S. international revenue.

For Employees: If your employer exports to the U.S., stay alert to management announcements about restructuring or cost-cutting measures. The Northern industrial belt faces the steepest potential job losses.

For All Residents: Track announcements from the Commission's Directorate-General for Trade and AICEP Portugal Global for real-time updates on market access conditions and any Portuguese government support measures. The situation is evolving rapidly, and clarity may emerge within weeks as the European Parliament reconvenes.