Why a President Trump Could Start a Trade War With Surprising Ease

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tags: election 2016, economics, Trump, Trade Policy



Americans often dismiss populist promises that emerge on the presidential campaign trail because they are unlikely to be passed by Congress. Should Donald J. Trump get elected, Congress most likely would moderate his proposals to cut taxes, increase spending and even to build a border wall.

But international trade policy is one area where a President Trump could unilaterally deliver on the changes that he has promised. ...

How has the White House accumulated such powers? As the United States entered World War I, Congress passed the Trading with the Enemy Act, which gave the president the power to regulate all international trade and financial flows, and even to freeze or seize foreign assets. It was an extremely broad grant of power because the law applies to all international commerce, not just that with enemy nations.

It’s a power meant to be used only in national emergencies or times of war, but this tends to be interpreted very broadly. For instance, the courts allowed President Nixon to add a 10 percent “import surcharge” in 1971, based on the continuing “economic emergency.” Mr. Hufbauer argues that continuing military engagements in Iraq and Afghanistan “would seemingly suffice to satisfy” this requirement.

Alternatively, the president could rely on the International Emergency Economic Powers Act of 1977, originally written to give the president the tools to inflict economic sanctions on America’s enemies. The law could easily be used to restrict trade with just about any country. While the law is supposed to be exercised only in the wake of an “unusual and extraordinary threat,” Mr. Hufbauer says that this is a standard that is easily met, as “the courts have never questioned presidential declarations of a ‘national emergency.’ ” ...




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