President Donald Trump has taken a novel approach to trade regulations by utilizing emergency sanctions law to implement significant tariffs. His administration has introduced a 25% tariff on imports from Canada and Mexico, along with a 10% duty on Chinese goods, citing the need to control fentanyl trafficking and illegal immigration into the United States.
IEEPA: A Controversial Basis for Trade Tariffs
Legal and trade analysts highlight that Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) to enforce these tariffs is unconventional and legally unprecedented. Historically, IEEPA has been used to impose economic sanctions in times of crisis, but never to justify import duties. This move is expected to face legal scrutiny and potential court challenges.
Trump declared a national emergency under IEEPA, citing the “extraordinary threat” posed by fentanyl and illegal immigration. While IEEPA has been used against foreign adversaries, such as imposing sanctions on Russia due to its war in Ukraine, its application to trade policies involving key U.S. allies like Canada and Mexico is unprecedented.
Legal and Trade Consequences
During his first term, Trump imposed tariffs on steel, aluminum, and Chinese imports using different trade statutes, which required thorough investigations and public hearings. By invoking IEEPA in his second term, he has sidestepped these regulatory steps, implementing tariffs more swiftly.
“The courts have traditionally upheld the president’s ability to take emergency actions, particularly on national security grounds,” said Tim Brightbill, co-chair of Wiley Rein’s international trade practice. “The question is whether that includes tariffs, as IEEPA has never been utilized in this way.”
Experts anticipate that business groups and industry associations will seek to challenge the tariffs in court, but they face legal hurdles. Judges tend to defer to the executive branch on matters involving national emergencies. William Reinsch, a trade analyst at the Center for Strategic and International Studies, commented, “An emergency is essentially what the president declares it to be.”
Historical Context and Differences
A similar case occurred in 1971 when President Richard Nixon imposed a 10% tariff on imports under the 1917 Trading With the Enemy Act to stabilize the U.S. economy after abandoning the gold standard. Courts upheld Nixon’s action because it was directly linked to an economic crisis. However, Jennifer Hillman, a trade law professor at Georgetown University and former WTO appellate judge, argues that Trump’s justification lacks such a clear connection.
“Nixon’s tariffs were directly tied to a balance-of-payments crisis,” Hillman explained. “Trump’s argument—that broad tariffs on imports from Canada, Mexico, and China are necessary to curb fentanyl trafficking and illegal immigration—stretches the intent of the law.”
Previous Threats and Congressional Response
In 2019, Trump considered using IEEPA to impose tariffs on Mexican imports over border security concerns but withdrew the plan after Mexico agreed to strengthen its border enforcement. Additionally, during his first term, he used the National Emergencies Act to redirect federal funds for constructing a border wall. Should the courts uphold his use of IEEPA for tariffs, many believe that legislative reforms will be necessary to clarify the law’s scope.
Peter Harrell, a national security lawyer and senior fellow at the Center for a New American Security, expressed concerns over unchecked presidential power: “At the very least, courts should recognize that allowing Trump to use IEEPA unilaterally for tariffs undermines the balance Congress sought when delegating trade authority to the president.”
In response, U.S. Senator Tim Kaine recently introduced legislation to explicitly restrict IEEPA’s application to tariffs, arguing that the law was never intended for such economic measures. “Americans need lower prices, not arbitrary taxes on our top three trading partners,” Kaine stated, emphasizing the economic consequences.
The Future of Trade and Executive Authority
If upheld, Trump’s strategy could redefine how future presidents use emergency powers in trade policy. This move could set a precedent for leveraging national security justifications to bypass congressional oversight on economic decisions. However, if the courts reject this approach, it will reinforce legal limitations on emergency trade measures.
This legal battle will play a pivotal role in shaping U.S. trade policies, testing the limits of executive power, and influencing global trade relationships. As litigation proceeds, both businesses and consumers will closely monitor the potential impact on costs, supply chains, and economic stability.
