Trump is considering a national economic emergency declaration to allow for new tariff program, sources say

By Kayla Tausche, CNN

(CNN) — President-elect Donald Trump is considering declaring a national economic emergency to provide legal justification for a large swath of universal tariffs on allies and adversaries, four sources familiar with the matter told CNN, as Trump seeks to reset the global balance of trade in his second term.

The declaration would allow Trump to construct a new tariff program by using the International Economic Emergency Powers Act, known as “IEEPA,” which unilaterally authorizes a president to manage imports during a national emergency.

Trump, one of the sources noted, has a fondness for the law, since it grants wide-ranging jurisdiction over how tariffs are implemented without strict requirements to prove the tariffs are needed on national security grounds.

“Nothing is off the table,” said a second source familiar with the matter, acknowledging the robust discussion over declaring a national emergency that has taken place.

The Trump transition team did not respond to a request for comment.

In 2019, Trump used IEEPA to threaten a 5% tariff on all Mexican imports that would rise to 25% if Mexico declined to take action to reduce the number of undocumented immigrants crossing the border with the United States.

After Mexican officials traveled to Washington for a week of in-person negotiations – and an agreement was reached to reinstate the “Remain in Mexico” immigration policy – the tariffs were never implemented. But the specter of the potential action, predicated by a national emergency Trump had declared on the southern border three months earlier, led prominent business lobbying groups like the Chamber of Commerce and the Business Roundtable to prepare lawsuits challenging the legality of such a move.

No final decision has been made on whether to declare a national emergency, sources told CNN. Trump’s team is still exploring other legal avenues to buttress the tariffs that Trump pitched on the campaign trail.

“I think the president has broad authority to impose tariffs for a variety of reasons, and there are a number of statutory bases to do so,” said Kelly Ann Shaw, a trade attorney who served as Trump’s deputy assistant for international economic affairs. “IEEPA is certainly one of them.”

Trump’s advisers are evaluating the possibility of using section 338 of US trade law, which allows a president to impose “new or additional duties” against countries deemed to be discriminating against the commerce of the United States. In those cases, trade law permits the president to impose new tariffs in direct reciprocation against those countries in specific product categories – though it’s been untested in recent history.

They’re also considering revisiting the trade law – known as section 301 – that ushered in Trump’s initial tariffs on China on national security grounds. The Biden administration left the vast majority of Trump’s tariffs in place – and increased tariffs on certain products like electric vehicles – providing a basis for the incoming president to increase or adjust the tariffs as he sees fit. But implementing tariffs under this statute requires a government investigation, and companies affected by the changes often lobby for months to be excluded from the levies.

If Trump opted to declare a national economic emergency, which could be put into effect quickly, it’s unclear what evidence he would cite. During a press conference on Tuesday, Trump acknowledged the inherent strength of the economy, criticizing inflation but also saying, “Over the next four years the United States is going to take off like a rocket ship. But really it’s already doing it.” Trump pointed to surging economic approval ratings in recent polls.

Supporters of the tariffs say they’re essential for boosting US manufacturing.

“The Trump team understands we have to rebuild our industrial capacity for reasons of economic and national security, and it will be good for communities and American workers,” said Nick Iacovella, Senior Vice President, Coalition for a Prosperous America. “To accomplish those goals, you absolutely have to have a robust, pro-American trade policy that includes tariffs.”

– CNN’s Kate Sullivan contributed to this report.

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