It's an Emergency!
July 8, 2019
This week, I am going to talk about emergencies, specifically the International Economic Emergency Powers Act (IEEPA) of 1977. This law has always been controversial, but it has become more so recently after the president threatened to use it to impose tariffs on Mexico. Critics say, correctly, that the law was not intended for such purposes and, incorrectly, that the courts will put the president in his place and prohibit these kinds of actions. (Of course, since he did not actually impose tariffs on Mexico, that will not be subject to litigation—until he decides to do that again.)
So, what is this law and what is it about? And who cares? The statute itself is not that complicated. In plain language, this law gives the president extraordinary powers to act against an external threat—if he declares an international economic emergency. The threat is not defined beyond "an unusual and extraordinary threat . . . to the national security, foreign policy or economy of the United States," and it must originate "in whole or in substantial part" outside the United States.
Once an emergency is declared, the president has broad powers, including:
Investigate . . . 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 by any person, or with respect to any property, subject to the jurisdiction of the United States . . .
(He has other powers in case there is an actual attack on the United States, but I will focus on "normal" emergencies.)
The law was drafted to curtail even broader powers under the Trading with the Enemy Act of 1917 and in the process to repeal some existing emergencies that dated back as much as 40 years. The main curtailment provisions were the requirement for regular reporting to Congress on the state of the emergency and the limitation on the length of the emergency to one year, unless renewed. The intent was to provide some discipline and oversight over the process. In that respect, the effort has largely failed. When IEEPA was enacted, there were four emergencies that were repealed. Today there are 30 in effect, the oldest being against Iran, dating from 1979. Four of those have been declared by President Trump—two of them global, against various human rights abuses and corruption and interference in U.S. elections, one against Nicaragua, and one against "foreign adversaries.” (President Obama had ten over eight years.) Fifteen others have been repealed.
So, 45 of these in 42 years. Clearly, the national emergency has become a popular presidential tool, and, equally clearly, Congress and the courts have not exercised very aggressive oversight over it. Emergencies and the economic sanctions they permit are popular because, frankly, they are not war. For thousands of years, war was the main method of national coercion. As the lethality of military action has increased, particularly with the arrival of nuclear weapons, nations increasingly have seized on tools short of war to achieve their objectives. Entire books have been written on the effectiveness of these measures. Although the picture is complicated, there are two broad conclusions: economic measures are most effective when they are multilateral or imposed on small countries by big countries.
The tool is currently more controversial than usual because of the president's threat to use it to impose tariffs, which are clearly his favorite form of leverage. As you can see from the language above, tariffs are not one of the specifically enumerated powers. This has led people to argue that the president would be exceeding his authority if he imposed them under IEEPA. (As we know from the steel, aluminum, and China tariffs, there are other statutes.) Those same critics also argue the situation on the border is not really an international economic emergency. I believe neither of those arguments will prevail, though perhaps they should.
First, the bar for deciding what constitutes an emergency has gotten lower over the years. Presidents have declared international economic emergencies for Somalia, Zimbabwe, and South Sudan, among others. Those are tragic situations and humanitarian disasters, but it is stretch to count them as a threat to the United States in any direct sense. If they pass muster, it is hard to see why Mexico would not.
Second, though tariffs are not specifically mentioned, the term “importation or exportation” arguably encompasses them, and judges have historically been deferential to the executive on both the definition of an emergency and the president's exercise of his powers pursuant to one. His love for tariffs has prompted some negative congressional reaction, though not enough so far to lead to anything, and, in any event, not through amending IEEPA.
That reveals a dilemma. The president’s Mexican proposal was a misuse of IEEPA, but there remains broad agreement that the statute is necessary and appropriate. Real emergencies do occur, in addition to the phony ones, and the president should be empowered to deal with them. The best move would be for Congress to exercise more aggressive oversight of the emergencies on the books and consider amending IEEPA to more clearly define and limit what actions the president can take pursuant to it. Asking Congress to do its duty seems to be a tall order these days, but a review of IEEPA should be something all those who respect the Constitution can rally around.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Thanks to Yancy Molnar for suggesting this topic.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
© 2019 by the Center for Strategic and International Studies. All rights reserved.