Trump’s Mexican tariffs may stretch limits of U.S. emergency law: legal experts

May 31, 2019

By Brendan Pierson and Tom Hals

(Reuters) – U.S. President Donald Trump’s proposal to impose sweeping tariffs on Mexican goods to push Mexico to stop migrants from entering the United States is likely to prompt legal challenges, but is probably on firm footing under federal law, some legal experts said on Friday.

Congress has for decades ceded its Constitutional authority to levy tariffs to the president, and courts generally defer to the White House in areas of national security.

Trump cited the 1977 International Emergency Economic Powers Act (IEEPA) as the legal basis for his threat of imposing punitive tariffs on all goods from Mexico if steps were not taken to cut the flow of migrants, drugs and crime across the border.

The law gives the president the authority to regulate a wide range of economic activity, including “any transactions in foreign exchange,” after declaring an emergency “to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States.”

The emergency powers act has been used by presidents to impose sanctions on countries such as Iran and Sudan.

Employing it as a tool to cut the flow of migrants arguably falls outside the intent of Congress, which was for it to be used to respond to violent threats, said Raj Bhala, a professor at the University of Kansas School of Law who specializes in international trade.

But to block the measure in court, challengers would have to show the president was acting outside the letter of the law and national security interest, a difficult standard to meet because of the wide authority given to the executive branch under the act.

Individuals, companies or groups adversely impacted by the tariffs would likely have the right to sue.

The U.S. Chamber of Commerce, an influential business lobby, said it was weighing legal options to challenge the tariff plan. 

The American Institute for International Steel, for example, sued last year to challenge the constitutionality of some tariffs.

“The plaintiffs are really going to have an uphill climb,” said Steven Schwinn, a professor at the John Marshall Law School in Chicago.

Schwinn said if a plaintiff did succeed, it is also unclear if a court would block the tariffs against all Mexican goods, or just the goods of a particular plaintiff.

One legal vulnerability for the administration is the application of the emergency powers act to immigration. Trump’s 2016 election campaign and more than two years in office have been focused on reducing illegal immigration and building a border wall. U.S. officials say the immigration system is being overwhelmed by thousands of migrants, many of whom turn themselves over to border officials to claim asylum in the United States. Border facilities are straining to handle large numbers of people and many children.

Bhala also said the tariffs would almost certainly run afoul of both the North American Free Trade Agreement and the General Agreement on Tariffs and Trade, or GATT. Trump is renegotiating the NAFTA agreement, but it is still in effect. It is not yet clear how Trump’s tariff threat will affect the trade negotiations with Mexico.

NAFTA allows a member nation to impose tariffs under limited circumstances for specific goods, rather than across the board, as Trump has proposed, Bhala said.

NAFTA allows its member countries to initiate disputes against one another, which are heard by three-member panels of arbitrators. GATT disputes are overseen by panels of the World Trade Organization.

NAFTA also allows international investors to take action against countries, and Mexican companies could initiate a dispute against the United States.

However, Bhala said, the NAFTA and WTO dispute resolution processes are slow, taking years to reach a final judgment, and can be difficult to enforce.

This means that the U.S. courts will be the most practical forum for challenging the tariffs.

Jessica Levinson, a professor at Loyola Law School, agreed with Schwinn that it would be tough to prove that Trump exceeded his authority under the emergency powers act.

“It’s clearly beyond the spirit of the law,” said Jessica Levinson, a professor at Loyola Law School. “But is it within the letter of the law? Possibly.”

She said that the issue was a novel one that the courts had not ruled on.

“We’ve never had this kind of stress test of the Emergency Powers Act before.”

(GRAPHIC-Trump vows high tariffs on all Mexican goods link:

(Reporting by Tom Hals in Wilmington, Delaware and Brendan Pierson in New York; Editing by Noeleen Walder and Grant McCool)

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