The prospect of a national economic emergency declaration to justify universal tariffs on both allies and adversaries was reportedly considered by former U.S. President Donald Trump, according to unnamed sources cited by CNN. This potential move, leveraging the International Economic Emergency Powers Act (IEEPA), would have granted Trump significant authority over import management.
The IEEPA allows the president to control imports during a national emergency. While the Trump transition team did not comment on the report at the time, an inside source acknowledged discussions about declaring such an emergency, stating that “nothing is off the table.” This consideration aligns with Trump’s long-standing campaign promise to implement a minimum 10% tariff on all U.S. imports.
Just weeks after his 2016 election victory, Trump announced his intention to impose 25% tariffs on Mexico and Canada unless issues of illegal immigration and fentanyl trafficking were addressed. Trade experts believed such action would likely necessitate an IEEPA emergency declaration. A similar strategy was employed in 2019 when Trump threatened Mexico with a 5% tariff over illegal immigration, ultimately withdrawing the threat after Mexico agreed to enhanced border security measures.
Beyond targeting Mexico and Canada, Trump, known for his protectionist stance, had also pledged to impose 60% tariffs on all Chinese imports. This followed his previous actions, imposing tariffs of up to 25% on approximately $370 billion worth of Chinese goods during his first term, primarily using Section 301 of the Trade Act of 1974, which addresses unfair trade practices. Despite concerns about potential inflationary effects, Trump denied reports of scaling back these plans.
In addition to Section 301, Trump could have potentially utilized Section 232 of the Trade Expansion Act of 1962, a national security trade law that previously justified global tariffs on steel and aluminum. The IEEPA itself is a modernized version of the 1917 Trading with the Enemy Act, notably invoked by President Richard Nixon in 1971 to implement a 10% universal tariff to address a balance of payments crisis and influence currency valuations in Germany and Japan. The historical precedent set by Nixon demonstrates the potential reach of such emergency powers in reshaping international trade. Trump’s consideration of IEEPA highlights the potential for significant shifts in U.S. trade policy under his leadership.
