Key Points
- Trump imposed 25% tariffs on Canadian and Mexican imports and 10% on Chinese goods under IEEPA.
- The move aims to address fentanyl and illegal immigration but faces legal challenges.
- IEEPA has never been used for import tariffs, raising questions about its legal validity.
- Nixon used a similar tariff law in 1971, but his case had a clearer economic justification.
U.S. President Donald Trump has invoked the International Emergency Economic Powers Act (IEEPA) to impose tariffs on imports from Canada, Mexico, and China, citing an “extraordinary threat” from fentanyl and illegal immigration. The move includes a 25% tariff on Canadian and Mexican imports and a 10% duty on Chinese goods. However, trade and legal experts believe the decision will face swift court challenges, as IEEPA has never been used to justify import tariffs.
IEEPA, a 1977 law that grants the president broad economic sanction powers in times of crisis, has been previously used against Russia for its war in Ukraine. By declaring a national emergency, Trump bypassed the lengthy trade law processes he used in his first term to impose tariffs on steel, aluminum, and Chinese goods. Legal experts suggest courts may uphold his authority, given that judges rarely challenge a president’s definition of an emergency. However, whether IEEPA legally permits tariffs remains an open question.
The closest historical precedent is President Richard Nixon’s use of the 1917 Trading With the Enemy Act to impose a 10% tariff in 1971 amid a balance-of-payments crisis. While courts upheld Nixon’s action, trade law experts argue Trump’s reasoning may not be as legally sound. Unlike Nixon’s tariffs, which had a direct link to stabilizing the U.S. dollar, Trump’s tariffs lack a clear connection between fentanyl, illegal immigration, and universal import duties.
In 2019, Trump threatened to use IEEPA to impose 5% tariffs on Mexican goods over border security concerns, but he did not declare an emergency after Mexico agreed to step up enforcement. During his first term, he used emergency powers to redirect federal funds toward border wall construction.
Critics argue that if courts allow IEEPA to be used for tariffs, it would undermine congressional authority over trade. Senator Tim Kaine has introduced legislation restricting IEEPA’s use for tariffs, emphasizing that it was never meant to impose broad import duties. Kaine warned that the new tariffs could drive up prices for American consumers, calling them “senseless taxes” on major trading partners.
