Trump Could Use IEEPA, Section 301 to Enact Tariffs on Mexico, Canada and China, Trade Lawyers Say
President-elect Donald Trump will most likely either turn to the International Emergency Economic Powers Act (IEEPA) or Section 301 of the Trade Act of 1974 to impose his recently announced tariffs on Canada, Mexico and China, said trade lawyers interviewed by Trade Law Daily. Though much remains unknown about how Trump will impose these tariffs, the president-elect may turn to the two broad statutes to impose the tariffs to accomplish his stated goals of curbing the flow of migrants and fentanyl into the U.S.
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"I expect IEEPA is going to be getting a work out," Larry Friedman, partner at Barnes Richardson, said in an email.
To use IEEPA, Trump would have to find that undocumented immigration and drug trafficking are "unusual and extraordinary threats to national security," declare an emergency, then impose tariffs to address that emergency. The law requires the president to consult with Congress "in every possible instance." Friedman said there "are not a lot of guardrails" in the statute and that any challenge to the invocation of IEEPA would be an uphill climb.
Akin partner Matthew Nicely, the lead counsel in a pending case against Section 301 tariff action from Trump's first term, said he suspects "there will be legal challenges questioning whether the authority in that provision is as broad as the president-elect thinks it is."
Bill Reinsch, senior adviser at the Center for Strategic and International Studies, was less optimistic about the chance for an appeal of an IEEPA decision. While irreparable harm will be "easy to show," the issue will be finding a judge to grant an injunction to block the tariffs. "The answer is 'no,' it'll be hard to find a judge that will be willing to second guess the president on what counts as an emergency," Reinsch said.
Friedman agreed, noting "a court will be very hesitant to weigh in" if the case rests on the "macro merits of the President's decision as a policy matter or how the President weighed various factors influencing that decision." The questions more ripe for litigation will concern the procedural elements of the tariffs' implementation, how exclusions were granted and how origin decisions are made, he said, likening any ensuing litigation to the current state of litigation involving present Section 301 duties.
Reinsch said it's likely that a declaration of a national emergency regarding fentanyl and migration could realistically include Canada. Despite the bulk of those problems stemming from Mexico, Reinsch said the flow of migrants and fentanyl across the Canadian border "is a serious and growing problem." He noted recent statements from the Canadian government acknowledging this, claiming that "it appears to be a genuine issue."
The other avenue for Trump to pursue his ambitious trade agenda would lead through Section 301. However, Nicely said that if the president-elect "wants to take immediate action, then using either Sections 301 or 307 will be difficult.”
While he promised to impose tariffs on day one of his administration, Trump faces a host of procedural requirements linked to taking new action under Section 301. However, Section 301 tariffs on China that are currently in place could be expanded, though they were issued in response to China's technology transfer and intellectual property theft practices. In addition, the Biden administration faces an impending deadline by which it has to respond to a new Section 301 petition seeking tariffs on China related to the flow of fentanyl (see 2410180039).
Reinsch suggested Section 307 could be utilized to expand tariffs on China, despite the new tariffs not relating to the prospect of addressing IP-related acts. "All Trump has to do on China is declare that they did not meet the terms of the Phase One agreement" struck with the previous Trump administration, and "then that would permit him to put on additional tariffs," Reinsch said.