Trump pushes trade law limits with tariffs on Canada, Mexico, and China

Photo: Reuters

President Donald Trump has entered new territory in trade law by using an emergency sanctions law to impose heavy tariffs on goods from Canada, Mexico, and China. He announced a 25% tariff on Canadian and Mexican imports and an additional 10% duty on goods from China. The move, according to Trump, is aimed at tackling two major issues: the illegal import of fentanyl and immigration concerns along the U.S. border.

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The legal basis for these actions comes from the International Emergency Economic Powers Act (IEEPA) of 1977. This law is usually used to impose sanctions during national crises, but it has never been tested for placing tariffs. Trade and legal experts predict Trump’s decision will likely face court challenges, which could set important legal precedents.

On Saturday, as expected, Trump declared a national emergency under IEEPA, calling the situation an "extraordinary threat" due to the influx of fentanyl and illegal immigration. The IEEPA allows the president to take swift action during emergencies, such as imposing economic sanctions, which have previously been used against countries like Russia during its war in Ukraine.

By using IEEPA, Trump found the quickest path to enforce tariffs. Other trade laws he previously relied on during his first term, like those targeting Chinese goods and metals like steel and aluminum, required long investigations and public consultations.

Tim Brightbill, an international trade expert, stated that courts often support a president’s power to act during emergencies, particularly when national security is at stake. However, the key question now is whether tariffs fall under this category since IEEPA has typically been used for financial sanctions rather than import duties.

Jennifer Hillman, a trade law professor at Georgetown University and a former judge at the World Trade Organization, voiced doubts about the legal connection between Trump’s emergency declaration and the widespread tariffs. Hillman argued that the law requires a clear link between the problem and the proposed solution. In this case, tariffs on all goods from Canada, Mexico, and China don’t appear to be a direct solution to the fentanyl crisis or immigration issues.

"The tariffs aren’t just focused on fentanyl-related goods," Hillman said. "So it’s hard to see how they directly address the stated emergency."

This situation has drawn comparisons to former President Richard Nixon’s actions in 1971 when he imposed a 10% tariff using a similar law called the Trading with the Enemy Act of 1917. At that time, the goal was to control rising imports and stabilize the dollar after it was removed from the gold standard. Nixon’s tariffs were upheld by the courts since there was a clear link between the emergency and the remedy.

In contrast, Hillman pointed out that Trump's justification lacks that clear connection. Tariffs, in this case, are broadly applied and not limited to fentanyl or immigration-related goods.

This isn’t the first time Trump has tried to use IEEPA for tariffs. In 2019, he threatened to impose 5% duties on Mexican goods over border security issues but backed down after Mexico agreed to enhance its border measures.

If the courts uphold Trump’s use of IEEPA for tariffs, some experts believe Congress may need to revise the law to include more oversight. Peter Harrell, a national security lawyer, emphasized that allowing such a broad use of IEEPA could undermine the balance Congress intended when giving tariff powers to the president.

U.S. Senator Tim Kaine, a Democrat, recently introduced legislation to limit the use of IEEPA for imposing tariffs. Kaine argued that the law was never designed for this purpose and that tariffs would only hurt American consumers.

"Virginians want lower prices, not higher ones," Kaine said. "The last thing we need is new, unnecessary taxes on goods from our biggest trading partners."

As this legal battle unfolds, it will likely shape how future presidents can use emergency powers in trade disputes and economic matters.