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Experts Weigh in on Trump’s Potential Use of IEEPA Powers Against Mainland China

As previously reported, in a tweet issued on 23 August President Trump “ordered” U.S. companies “to immediately start looking for an alternative to China” and bring back production to the United States. He later claimed that he has the “absolute right” to require U.S. companies to stop doing business in mainland China under the International Emergency Economic Powers Act of 1977, which the president cited earlier this year when he threatened to impose tariffs starting at five percent on all imports from Mexico over an immigration dispute with that country. However, Trump subsequently clarified that he was not necessarily ordering American firms to leave mainland China, stating at a press conference that while he has the right to do so “I have no plan right now.”

As outlined in a March 2019 report by the non-partisan Congressional Research Service, IEEPA was originally part of congressional actions to reform the earlier Trading with the Enemies Act. IEEPA and related legislation were enacted to increase congressional involvement in sanctions implementation as well as limit presidential power to uni-laterally declare national emergencies. In the first use of IEEPA during the 1979 Iran hostage crisis, President Jimmy Carter imposed trade sanctions against Iran and froze Iranian assets in the United States. CRS noted that as of 1 March 2019 presidents had declared a total of 54 national emergencies invoking IEEPA, 29 of which are still on-going.

Various observers have recently weighed in on Trump’s potential use of IEEPA against mainland China. For example, former USTR General Counsel Jennifer Hillman on 5 September wrote a brief for the Council on Foreign Relations in which she agreed that IEEPA could be used to prevent future investments in mainland China but could not be used to force existing investments to leave. Then again, she argued that IEEPA limitations on transactions could make it very difficult for those already there to continue to do business as before.

Hillman further indicated that any action under IEEPA requires that the president (i) declare a national emergency based on an “unusual and extraordinary threat” to the national security, foreign policy or economy of the United States emanating from a specific country, and (ii) consult with Congress before taking action. To stop him, Congress would have to approve a joint resolution that would then face a likely veto from the president. A two-thirds majority would be required to override such a veto, which appears an unlikely scenario given the current political reality in Washington.

Other experts have generally blasted Trump’s expansive interpretation of his IEEPA powers. For example, Stephen Vladeck, professor at the University of Texas Law School and CNN legal commentator, tweeted on 24 August that “one of the enduring phenomena of the Trump era is going to be the list of statutes that give far too much power to the President, but that many didn't used to worry about—assuming there'd be political safeguards.”

The libertarian-leaning Cato Institute’s Gene Healy also recently wrote an extensive critique of IEEPA’s authority. Healy noted that IEEPA has been challenged repeatedly in U.S. courts but the courts have generally sided with the Executive. He also endorsed legislation introduced by Sen. Mike Lee (Republican-Utah) that would amend IEEPA to void new emergency declarations within 30 days unless Congress affirmatively approves them as well as require new emergency declarations to receive annual re-approval by Congress.

As noted in the CRS report, Congress has never attempted to terminate a national emergency invoking IEEPA. Instead, it has directed the Executive on numerous occasions to use IEEPA authorities to impose sanctions. CRS indicated, however, that Congress may want to consider (i) whether IEEPA “appropriately balances the need for swift action in a time of crisis with Congress’ duty to oversee executive action” as well as (ii) that statute’s role in implementing Congress’ influence in U.S. foreign policy and national security decision-making.

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