On Feb. 1, President Donald Trump issued three executive orders concerning a “public health crisis” regarding the influx of illicit drugs to the United States from Canada, Mexico, and China. The orders reiterate the national emergency the president declared on his first day in office regarding the “grave threat to the United States posed by the influx of illegal aliens and illicit drugs” and expand the scope of that emergency. As required by the underlying statutes on which the president relies, the orders refer to alleged “failure[s]” of these other governments to stop the drug trade as “an unusual and extraordinary threat.” The orders also announced that goods from these three countries would be subject to tariffs at varying levels beginning Feb. 4 at 12:01am.
On Feb. 3, the leaders of Mexico and Canada each spoke with the president. Following those calls, the Trump administration announced a 30-day suspension of the tariffs on products from Mexico and Canada in light of promises made by each leader (some of which were promises that they had made already in 2024) to shore up their border protection and related efforts.
On Feb. 4, China announced retaliatory measures against the United States in the form of tariffs on certain U.S. products, as well as export controls among other regulatory interventions.
What Has Been the Effect?
The U.S. foreign commerce bureaucracy – in this instance, namely the International Trade Commission and Customs and Border Protection (CBP) – moved swiftly to take steps to arrange to charge importers additional taxes on the goods they bring in to the United States from these three countries, although now only the restrictions related to products from China will remain in place. Products from China will face a 10 percent levy on top of any other tariff to which they would be subject.
If the Trump administration decides to lift the suspension and re-impose the measures on Canada and Mexico, then all products from Mexico and most from Canada will be subject to a 25 percent levy. Energy products from Canada will be subject to a 10 percent levy. (Recall that, as a result of the United States-Mexico-Canada Agreement (USMCA) – the free-trade agreement negotiated by the Trump administration in 2018-2019 – most products presently enter the United States from these two countries with no such charge.)
Customs brokers will need to work with CBP to possibly amend their paperwork regarding these goods in which they estimate their duty liability. Products are likely to continue to flow, but CBP will send importers potentially hefty bills. Perhaps most problematic, or at least challenging to implement, is the president’s effective elimination of the de minimis qualification regarding products from China. CBP has reported that nearly four million de minimis shipments enter the United States on an average day and about two-thirds of those originate in China. The need to review all those shipments will take away from other work, and may require more staff when CBP is already facing a staff shortage.
What is the Legal Basis for These Actions?
President Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA), and relatedly the National Emergencies Act, as the basis for these actions. As Scott Anderson and I discussed the last time the president considered this path for putting tariffs on products from Mexico in 2019, the IEEPA provides the president with certain extraordinary authorities that he may use to “deal with any unusual or 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.”
Although no president has used the IEEPA to introduce tariffs on products from U.S. trading partners before, the IEEPA allows the president to exercise wide-ranging authority. In relevant part, it authorizes the president to:
(A) investigate, regulate, or prohibit—
(i) any transactions in foreign exchange,
(ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof,
(iii) the importing or exporting of currency or securities … [;] [and]
(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest ….
Some commentators have argued that the president’s use here of the IEEPA exceeds the bounds of this statutory authority, pointing to the fact that, for example, the IEEPA does not mention explicitly the power to impose duties, among other arguments. But courts have tended to favor the president’s wide discretion under both the IEEPA and similar laws in the past. In the 1970s, a federal appellate court upheld President Richard Nixon’s authority to impose tariffs under a similar law for a limited period of time.
Interestingly, another law, which the president did not invoke, gives the president the authority to impose tariffs specifically to address uncooperative drug-producing and drug-transit countries. This statute, enacted as part of the Trade Act of 1974, allows the president to apply up to 50 percent tariffs to products from any country that is considered a “major drug producing country” or “major drug-transit country.” In September 2024, President Joe Biden determined that Mexico and China qualified as such countries. The availability of this authority may cast doubt on claims that the president has exceeded his delegated powers. For U.S. trading partners, however, premising the tariffs on drug issues on which Canada, Mexico, and the United States were already working together as compared to other thorny problems among the three countries may have made it easier to find common ground on an arrangement that would allow the president to suspend the tariffs.
What Could Happen Next?
CBP has begun to collect these tariffs on products from these China. As of now, there are few exceptions or exclusions. If these tariffs remain in place for an extended period, we may see the business community seek an exclusion process by which companies can at least apply to be exempted from having to pay these border taxes on their products. The first Trump administration set up an exclusion process for the tariffs imposed on products from China (one study has concluded that that process favored politically connected companies over others). No law requires the administration to set up exclusions, nor does any law prohibit it.
Canada, Mexico, and China have also announced that they will commence dispute settlement proceedings at the World Trade Organization (WTO) and, in the case of Mexico and Canada, under the USMCA. In simplest terms, the legal arguments for such proceedings turn on the fact that the United States, as a USMCA party and as a WTO member, has an obligation not to impose discriminatory tariffs on other parties and members. Even if the United States were to lose such a case under the USMCA, the likely remedy for Canada and Mexico would be to impose their own trade-related measures – something they already planned to do. And the WTO dispute settlement system is in a state of disarray such that disputes cannot be resolved absent agreement between the parties to use a special process.
Given the president’s seemingly broad authority under the IEEPA, questions remain about what those opposed to the tariffs – apart from the trading partners themselves — could do to stop their implementation.
Let’s start with the litigation option. An affected importer could file a lawsuit challenging the president’s action along one or more dimensions such as with respect to the nature of the national emergency or the constitutionality of the use of the IEEPA to impose tariffs. The importer’s choice of court would depend on the part of the action that it claims is a violation of the law and on what grounds. Most cases concerning tariff actions are filed at the U.S. Court of International Trade, a specialized federal court based in New York City.
Many of the cases against the Trump and Biden administrations that sought to put a stop to tariffs during the last eight years have been filed in that court. On appeal to the U.S. Court of Appeals for the Federal Circuit, the government has won nearly all the cases that have concluded (some remain pending), but those cases have not involved the IEEPA. We may see a case concerning the tariffs on products from China in the coming days. One might expect an importer to seek a preliminary injunction to put a pause on the implementation of the tariffs as soon as possible, but that is a high bar to meet.
As for Congress, although some members have spoken out in opposition to the tariffs, there is not enough resistance within the legislature for it to intervene. During both the first Trump administration and the Biden administration, members proposed legislation that would retract some of the delegated authority to the president to regulate international commerce, but none of those initiatives gained sufficient traction with respect to the president’s security-premised tariff-raising authority. Now does not seem like the time when the momentum will shift. Without legislation to revise its prior delegations, it would take a veto-proof majority for Congress to intervene in this particular national emergency and tariff action.
In all likelihood, the three governments will continue to negotiate arrangements with the United States to address the president’s concerns such that these tariffs may be lifted or may be more limited than the initial orders suggest. One question remains as to how long that will take, and how long a deal will last. For now, there is supposedly 30 days’ reprieve on the North American disruptions. But there may be others. We know well by now, just two weeks into this administration, that Trump is inclined to threaten and apply tariffs as a means of coercing governments to accede to his wishes on a variety of topics at any time.
Editor’s note: This piece is part of the Collection: Just Security’s Coverage of the Trump Administration’s Executive Actions