Donald Trump, the U.S. president-elect, is considering declaring a “national economic emergency” to justify imposing a ‘universal tariff’ that does not discriminate between allies and adversaries, CNN reported on the 8th, citing four anonymous sources. According to CNN, Trump is contemplating basing the declaration of an economic emergency on the International Emergency Economic Powers Act (IEEPA) enacted in 1977 to introduce a new tariff program.
IEEPA grants the president extensive authority to control economic activities, such as trade with foreign countries, in the event of a national emergency that poses a threat to U.S. security, foreign policy, or the economy. One source indicated that Trump prefers this law because it grants authority to impose tariffs without strict requirements on security grounds.
However, another source acknowledged that active discussions are underway regarding the declaration of a national economic emergency, adding that “all options are being put on the table for consideration.” During his election campaign, Trump pledged to impose a 10-20% universal tariff on all imports into the United States.
Despite this, there are significant concerns that the universal tariff policy could have considerable impacts on the U.S. economy and consumers, and potentially disrupt the global trade order. Even if Trump proceeds with declaring a national emergency to implement the universal tariff, CNN noted that it remains unclear on what grounds the emergency would be justified.
The previous day, at a press conference held at Mar-a-Lago in Palm Beach, Florida, where his residence is located, Trump criticized rising prices but also stated, “Over the next four years, the U.S. economy will soar like a rocket, but it’s already happening,” affirming the healthy state of the economy.