With a few days remaining until Donald Trump's inauguration as the 47th President of the United States, attention is turning to the likelihood of him imposing broad tariffs on countries around the world, as he pledged during the election. How will he leverage his command's policy tools to bring this vision to life?
On January 6, The Washington Post reported, citing multiple sources, that Trump's staff had been considering a reduced tariff plan focused only on specific key imported goods (in sectors such as defense, medical supplies, and energy production), which Trump later denied.
A follow-up report on January 9 by CNN revealed that four sources disclosed that Trump planned to declare a national economic emergency to impose large tariffs on allies and competitors. However, Trump has remained silent on this matter until now.
Afterward, On January 12, The Wall Street Journal reported that Stephen Miran, Trump's nominee for chairman of the White House Council of Economic Advisers, suggested in November 2024 that tariffs on all imports could rise to 20% or even 50%, with this high tariff acting as a price for allies to secure US defense guarantees.
Most economists advocate for free trade and tend to oppose high tariffs. However, Miran is one of the few economists who strongly supports high tariffs, making him especially suited for advising Trump's new administration on economic policy. His stance on protective high tariffs aligns with Trump's frequent claims about charging allies for protection.
IEEPA as a new tool for tariffs?
Compared to the well-known Section 301, what advantages does the International Emergency Economic Powers Act (IEEPA) offer Trump in imposing comprehensive tariffs?
Many believe that Trump's 2.0 tariff policy will likely rely on tools successfully applied during his "1.0" period, such as Sections 201, 232, and 301, to negotiate and pressure opponents to implement policies.
These sections not only have established implementation models but also allow for quick and effective communication of the US stance. In contrast, using IEEPA to impose tariffs lacks precedents from Trump's first term, but its advantage lies in faster implementation and the ability to impose widespread tariffs.
This approach seems to present a viable opportunity for the Trump administration, especially given its tendency to reject conventional methods. Recently revealed by CNN, this policy route remains unrefuted by Trump, suggesting a certain level of feasibility.
IEEPA authorizes the US president to regulate international trade after declaring a "national emergency" in response to any situation that poses an "unusual and extraordinary threat" to the US, particularly threats that originate fully or partially from outside the United States.
Under this law, the president has broad executive powers to block various types of transactions. IEEPA clearly states that the president must consult with Congress when exercising these powers, but does not require formal investigations or detailed reports.
Thus, based on the law, if Trump declares a national emergency, he could innovate in applying the IEEPA mechanism according to his personal policy goals, making it a new tool for imposing broad tariffs on foreign countries.
No mutual exclusion among tariff tools
It is important to note that these various policy tools are not mutually exclusive. Trump could use them in combination to target general and specific tariffs and countries, applying a strategy of threats to achieve his goals.
Since Washington may invoke Sections 201, 232, and 301 in the incoming administration, which does not require congressional approval and Trump has previously used in his first term, this approach becomes the most likely method for implementing Trump's 2.0 tariff policy.
However, given Trump's consistent call during the election for broad tariffs, the existing US legal framework only offers IEEPA as a path capable of meeting the need for widespread tariff implementation. Therefore, CNN's recent report on this approach is well-founded.
At the same time, aside from imposing general tariffs, the Trump administration still has policy needs and ultimate goals related to tariffs on "specific countries" and "specific products," such as China, Canada, and Panama.
Given the nature of tariffs as a policy tool, it is anticipated that the Trump administration will engage in trade negotiations based on Sections 201, 232, and 301, while also conducting related trade investigations, and determining final investigative conclusions and corresponding "punitive" tariff levels based on the negotiation outcomes.