President-elect Donald Trump is contemplating the use of a national emergency declaration to advance his wide-ranging tariff plan, according to a report by CNN on Wednesday morning. This strategy would allow Trump to leverage the International Economic Emergency Powers Act (IEEPA), a legislation that grants the president authority over imports during a national crisis. The report has already begun to impact financial markets; stock futures weakened while the U.S. dollar gained strength against most other currencies. However, no definitive decision has been made regarding the declaration of a national emergency, and the Trump transition team has yet to respond to CNBC's request for comment.
Trump's team is exploring various legal avenues to implement his proposed taxes on imports, which he frequently discussed during his campaign. These plans include imposing tariffs as high as 60% on Chinese products and increasing fees on Canadian and Mexican goods by 25%. Alternative legal arguments being considered involve utilizing specific provisions within U.S. trade law. The Washington Post recently reported that narrowing the focus of tariffs might be a more favorable approach for Wall Street.
The consideration of a national emergency declaration highlights the significance of Trump's tariff plan as a cornerstone of his presidential campaign. The IEEPA could serve as the legal framework enabling the incoming president to fulfill his promises of revamping trade policies to protect American industries. Should Trump choose this path, it would grant him substantial power to implement tariffs that reflect his campaign rhetoric.
Despite the potential economic implications, the decision remains under review with no final determination reached. Trump's team continues to assess various legal options to solidify the proposed tariff structure. The financial markets' reaction to the CNN report underscores the high stakes surrounding the potential policy shift.