With an emergency sanctions statute, President Donald Trump has ventured into uncharted terrain in terms of trade law, arguing that imposing 25% tariffs on imports from Canada and Mexico and an additional 10% charge on Chinese goods is necessary to combat fentanyl and illegal immigration into the United States.
 The 1977 International Emergency Economic Powers Act (IEEPA) has not been proven to be effective in imposing import duties, according to trade and legal experts, and Trump’s action is expected to be swiftly challenged in court, potentially setting significant precedents.
Trump announced a national emergency under IEEPA on Saturday, as was widely anticipated, citing the “extraordinary threat” posed by illegal immigration and fentanyl.
In times of crisis, the legislation grants the president extensive authority to impose financial and economic penalties, including against Russia for its war in Ukraine.
Since the trade laws Trump employed in his first four years as president to impose levies on steel, aluminium, and Chinese imports would have needed months of research and public discussions, IEEPA provided him with the quickest route to enacting tariffs in the second week of his second term in office.
According to Tim Brightbill, co-chair of the international trade practice at the law firm Wiley Rein, “the courts have historically upheld the president’s power to take emergency actions, especially when they are related to national security.”
“Since IEEPA has only been used for sanctions, the question is, does that include tariffs?” Brightbill said. He went on to say that businesses or trade associations will probably try to get an injunction, but they could have a difficult time stopping the levies.
According to William Reinsch, a trade expert at the Centre for Strategic and International Studies in Washington, “judges are not likely to second guess a president on what constitutes an emergency,” and the “emergency is whatever he says it is.”
NIXON’S TARIFFS
Trump’s action is most similar to that of the late President Richard Nixon, who, after removing the dollar from the gold standard, used the 1917 Trading With the Enemy Act, the predecessor law to IEEPA, to impose a 10% universal U.S. tariff in 1971 to curb rising imports during a balance-of-payments crisis.
Nixon’s action was upheld by courts, but Trump’s move might not be appropriate in the emergency, according to Jennifer Hillman, a Georgetown University professor of trade law and former World Trade Organisation appellate judge.
The Nixon decision and the IEEPA statute’s reporting requirements imply that the emergency—fentanyl and migrants—and the solution—universal tariffs on Canada, Mexico, and China—must be causally related.
“I don’t think there is such a connection in this case, at least not in my opinion,” Hillman stated. “There is no obvious reason why tariffs on all goods are ‘necessary’ to address the issue of fentanyl or migrants, as the tariffs would not be applied only to fentanyl.”
She said that Nixon’s use showed a far stronger correlation between the dollar’s value and the volume of imports.
Trump never declared an emergency when Mexico promised to strengthen border security, despite his threat to invoke IEEPA in 2019 to support 5% tariffs on Mexican goods over border migration difficulties.
During his first term, Trump also used public funds to build a wall along the southern border by invoking the National Emergencies Act.
Peter Harrell, a national security attorney and senior fellow at the Centre for a New American Security, stated that Congress should amend IEEPA to require more monitoring if courts permit the use of IEEPA for tariffs to remain in effect.
However, he wrote in a note that opened a new tab on Friday that “at the very least, courts should find that allowing Trump to wave his magic Sharpie to sign an IEEPA executive order imposing tariffs would upset the balance Congress has long sought to strike when it delegates its tariff authority to the president.”
Democratic U.S. Senator Tim Kaine last month proposed legislation to limit the use of IEEPA for tariffs, claiming the agency was never created or intended for such uses.
“Virginians want lower prices, not higher ones and the last thing we need are new, senseless taxes on imports from America’s three largest trading partners,” Senator Kaine stated on Saturday.
