How Trump Could Unilaterally Place Tariffs on Mexico and Canada
During his first term in office, President Donald Trump oversaw the renegotiation of a continent-wide trade deal that he hailed as “the fairest, most balanced, and beneficial trade agreement we have ever signed into law. It’s the best agreement we’ve ever made.”
As part of that deal, the United States-Mexico-Canada Agreement (USMCA), the three countries agreed that they would not “increase any existing customs duty, or adopt any new customs duty” beyond the tariffs and duties outlined in the agreement.
Five years after he signed it, however, Trump seems to have little regard for that provision of the USMCA. He’s now threatening to slap a general tariff on all imports from America’s two neighbors and two largest trading partners. During an impromptu press conference in the Oval Office on Monday, Trump said those tariffs could be in place as soon as February 1.
Calling this an unprecedented maneuver is an understatement. Trump is threatening to start a trade war with two American allies, in direct violation of a trade deal that he signed just five years ago. If it’s not a bluff, these tariffs would be economically damaging to all three North American economies. If it is, then it is an unnecessary bit of saber-rattling that serves only to undermine a deal that, again, Trump had signed and praised.
If he decides to follow through on the threat, however, Trump almost certainly has the power to do so. Here’s how.
First, the USMCA itself is not a serious impediment. Any trade deal is ultimately only as good as all the signatories’ willingness to abide by it—and the hypocrisy of tearing up his own agreement is apparently not enough to stop Trump. Additionally, the deal included a clause, Article 32.2, guaranteeing each country the right to apply new tariffs for “the protection of its own essential security interests.” If Trump sets up his tariffs as a national security issue, the U.S. could claim the USMCA allows it.
That’s convenient for Trump, because he’d likely also have to invoke a national emergency on the domestic side of things.
The most straightforward way for a chief executive to impose new tariffs without congressional approval or a lengthy review process—which would be required if Trump used Section 301 of the Trade Act of 1974, as he did in his first term to impose tariffs on China—would be to invoke the International Emergency Economic Powers Act (IEEPA). That law, passed by Congress in 1977, gives t
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