The Supreme Court  has held that the IEEPA, read in conjunction with the Trading with the Enemy Act, gives the president wide discretion to impose comprehensive embargoes on products from foreign countries. 

On August 23, 2019, President Donald Trump tweeted U.S. firms “are hereby ordered to start immediately looking for an alternative to China, including bringing [their] companies [back to America] and making [their] products in the USA.” Although this mandate was widely questioned, there may be a legal foundation to create an enforceable policy should the administration decide to take action.

The International Emergency Economic Powers Act (IEEPA) 50 U.S.C. § 1701, et seq. allows the president to declare a national emergency to “deal with any unusual and extraordinary threat, which has its source… outside the United States, to the national security, foreign policy, or economy of the United States.” 50 U.S.C. § 1701. Extreme in its breadth, the IEEPA gives the president discretion to “investigate,” “block,” “regulate,” “compel” or “prohibit” the “importation,” “transfer” or “acquisition” of “property in which any foreign country or a national thereof has any interest.” Id. at § 1702(a)(1)(B). The IEEPA’s powers allow the president to act with respect to any person “subject to the jurisdiction of the United States.” Id.

The Supreme Court of the United States has held that the IEEPA, read in conjunction with the Trading with the Enemy Act (TWEA), gives the president wide discretion to impose comprehensive embargoes on products from foreign countries. In particular, the Supreme Court determined that the IEEPA was lawfully employed to impose restrictions on travel into and trading with Cuba. See Regan v. Wald, 468 U.S. 222 (1984). Lower federal courts have also upheld the IEEPA against First Amendment free speech and Fifth Amendment due process challenges. See, e.g., U.S. v. Al-Arian, 308 F.Supp.2d 1322 (M.D. Fla. 2004) (First Amendment); Holy Land Foundation for Relief and Development v. Ashcroft, 333 F.3d 156 (D.C. Cir. 2003) (Fifth Amendment).

Both the IEEPA and the TWEA have been used as important tools of executive power to impose economic sanctions and control economic transactions. Since 1977, presidents have invoked the IEEPA to declare 54 national emergencies, including in situations involving Iran, North Korea, Syria and Sudan. See Congressional Research Service, “The International Emergency Economic Act: Origins, Evolution, and Use” (March 20, 2019). Twenty-nine of those declared national emergencies are still active, and the average length of an emergency declared under the IEEPA has been 10 years. Id. Although the president is required to consult with Congress before and after declaring a national emergency, see 50 U.S.C. § 1703, Congress has never used its termination powers under the IEEPA, id. at § 1706, to stop the president from declaring a national emergency. Congressional Research Service, supra. As of the publication date of this Alert, President Trump has not declared a national emergency nor has he consulted with Congress about declaring a national emergency to block imports from China.

For More Information

If you have any questions about this Alert, international trade issues with China or the tariffs issued under Section 301 of the Trade Act, please contact Brian S. Goldstein, J. Manly Parks, Nathan B. Reeder, any of the attorneys in our International Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.