President-elect Donald Trump is reportedly considering invoking a national economic emergency to justify an expansive tariff regime targeting both allies and adversaries.
According to CNN report, sources familiar with internal discussions, the strategy could redefine global trade dynamics during Trumpโs second term, marking a dramatic pivot in U.S. economic policy.
At the heart of the plan lies the International Economic Emergency Powers Act (IEEPA), a legal framework granting the president sweeping authority to manage imports during a national emergency. Trumpโs affinity for IEEPA stems from its broad jurisdiction, allowing tariffs to be implemented without stringent national security justifications.
โNothing is off the table,โ one insider revealed, underscoring the high-stakes deliberations within Trumpโs team.
Reviving a Controversial Playbook
This wouldnโt be the first time Trump has wielded IEEPA to further his agenda.
In 2019, he leveraged the act to pressure Mexico with a looming 5% tariffโset to escalate to 25%โunless it curbed undocumented migration into the U.S. While the tariffs were ultimately averted through negotiations, the episode highlighted Trumpโs readiness to use emergency powers as a bargaining chip, drawing both praise and criticism from business leaders and policymakers.
If enacted, the proposed tariffs could be rolled out swiftly, bypassing lengthy investigations required under other trade statutes.
However, questions remain about what evidence Trump would present to justify the emergency declaration. At a recent press conference, Trump acknowledged the economyโs underlying strength while simultaneously criticizing inflation and promising a โrocket shipโ trajectory for the next four years.
Alternative Legal Avenues
While IEEPA is a frontrunner in Trumpโs tariff toolkit, advisers are also exploring other legal mechanisms.
Section 338 of U.S. trade law, for example, allows for retaliatory tariffs against nations discriminating against American commerce, though it remains largely untested in modern trade policy.
Additionally, revisiting Section 301โthe statute that underpinned Trumpโs initial tariffs on Chinaโis on the table, though it would require government investigations and face resistance from affected industries.
The CNN report comes on the heels of one from The Washington Post Monday that claimed Trump’s aides were considering imposing the trade tariffs only on “certain sectors deemed critical to national or economic security.”
If so, this policy would diverge from Trump’s campaign promise of “universal tariffs” of up to 20 percent on all goods imported to the United States. So far, Trump’s tariff threats haven’t led to any official U.S. policy.
A Vision for โPro-Americanโ Trade Policy
Supporters argue that a robust tariff program is essential for revitalizing U.S. manufacturing and safeguarding national security.
โThe Trump team understands we have to rebuild our industrial capacity,โ said Nick Iacovella, Senior Vice President of the Coalition for a Prosperous America. โTo accomplish those goals, you absolutely have to have a robust, pro-American trade policy that includes tariffs.โ
Critics, however, warn of potential backlash from key trading partners and domestic industries reliant on global supply chains. Business groups like the Chamber of Commerce have previously opposed Trumpโs tariff threats, citing economic uncertainty and potential legal challenges.
The Stakes Ahead
As Trumpโs transition team weighs its options, the decision to declare a national economic emergency looms as a potential flashpoint in his administrationโs early days.
It remains to be seen ifย this strategy will reinvigorate American manufacturing or ignite a new era of trade tensions. Whatโs clear is that Trumpโs approach to trade policy will continue to challenge conventional norms, with profound implications for the global economy.
