What Is the International Emergency Economic Powers Act?

Gavel on world map centered on China
By Christopher Coble, Esq. on August 27, 2019 12:00 PM

Another day, another assertion of executive authority. "For all of the Fake News Reporters that don't have a clue as to what the law is relative to Presidential powers, China, etc.," President Trump tweeted Friday, "try looking at the Emergency Economic Powers Act of 1977. Case closed!"

Considering prior claims regarding deportation policy, rewriting the Constitution, emergency funding for the border wall, and impeachment procedures haven't been 100 percent accurate, the case seems far from closed. So what does the International Emergency Economic Powers Act do, and can President Trump really use it to ban trade with China?

In Case of Emergency

Prior to the IEEPA, presidents could declare emergencies without limiting their scope or duration and without congressional oversight. The law was passed in 1977 with the intent to rein in presidential authority when it came to emergency powers:

(a) Any authority granted to the President by section 1702 of this title may be exercised to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.
(b) The authorities granted to the President by section 1702 of this title may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for any other purpose. Any exercise of such authorities to deal with any new threat shall be based on a new declaration of national emergency which must be with respect to such threat.

Trump, however, has not declared any national emergency with respect to China, nor cited an "unusual and extraordinary threat." The president responded to China's plan to impose new tariffs in the ongoing trade war by accusing the country of intellectual property theft and telling American companies to produce goods in the United States.

"The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP," Trump tweeted. "Our great American companies are hereby ordered to immediately start looking for an alternative to China." While the president may have the power to block funds being transferred between the two countries, that's only after he declares an emergency, and, even then, he would lack the authority to pull existing investments out of China.

Power and Trade

Trump has cited the IEEPA before, as the basis for tariffs placed on goods imported from Mexico. While other presidents have invoked the law, it has almost entirely been to impose sanctions against foreign governments, individuals, and political organizations like suspected terrorists, terrorist groups, and drug traffickers.

And Congress does have the power to terminate an emergency declared by the president under the IEEPA, but the president can also veto the resolution unless it has a wo-thirds supermajority of both houses. That kind of majority against President Trump doesn't look likely now, but, as we said, he has yet to declare the emergency in the first place. So, his Twitter order to U.S. companies remains unenforceable.

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