Decoding the President’s Trade Toolkit
Under the Constitution, Congress is afforded the power to regulate commerce within and outside of the United States. To streamline the process, Congress has delegated authority to the President to investigate alleged violations of existing trade agreements and U.S. law and authorizes the President to negotiate future trade agreements.
On Capitol Hill, the House Ways & Means and Senate Finance Committees maintain oversight of all international trade matters. Several laws were enacted that grant import and export control powers to the President under special circumstances. Currently, the most relevant are:
If the President declares a national emergency, then sweeping economic powers related to tariffs and sanctions are granted and can be applied to multiple target products or countries and take effect almost immediately.
While IEEPA provides the most immediate and simple route to presidential tariffs, the administration opens itself up to litigation with less protection than other authorities.
President declares a national emergency and issues a written justification to Congress
An executive order or proclamation is published outlining the duty targets, rates and effective date
Review of the emergency on an annual basis for relevancy
Once the Commerce Department has completed an interagency investigation and determined that imports of a specific product pose a threat to national security, the President can impose tariffs and/or quotas as deemed necessary.
A stakeholder, domestic manufacturer, the President or a government agency (including Commerce) submits a complaint regarding a specific country.
Commerce initiates its investigation and posts a Federal Register notice.
Within 270 days, Commerce publishes a final report. If it reaches a…
Negative determination: the President is informed that no further action is required.
Positive determination: the President is informed and has up to 90 days to determine appropriate recourse.
Congress is notified of the President’s decision, which must be implemented within 15 days.
Commerce can decide whether to open an exemption process.
If a foreign country is suspected of engaging in unfair trade practices or violating a free trade agreement, the United States Trade Representative (USTR) will lead an interagency investigation. Upon completion of the report, the President can levy tariffs based on their recommendations.
A stakeholder, domestic manufacturer, the President or a government agency (including USTR) submits a complaint regarding a specific import.
USTR initiates an investigation within 30 – 45 days that can take anywhere between 6 – 18 months. An interim report is published with preliminary findings.
A final report is published including recommendations for appropriate actions to be taken by the President, who can then determine whether they want to move forward.
If tariffs are imposed, USTR can choose to open an exclusion process.
Utilize the GBA Tariff Tracker to help navigate the numerous announced and threatened tariff developments.