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5 things to know about the Emergency Economic Powers Act

Janet Nguyen and Kai Ryssdal Aug 26, 2019
President Donald Trump and Chinese President Xi Jinping in late 2017. Nicolas Asfouri/Getty Images

5 things to know about the Emergency Economic Powers Act

Janet Nguyen and Kai Ryssdal Aug 26, 2019
President Donald Trump and Chinese President Xi Jinping in late 2017. Nicolas Asfouri/Getty Images

President Donald Trump recently ordered American companies to stop doing business in China on Twitter, invoking a 1977 law known as the International Emergency Economic Powers Act.

His response came after China announced on Friday that it would raise tariffs on $75 billion worth of U.S. goods.

The act gives the president the “broad authority to regulate a variety of economic transactions following a declaration of national emergency,” according to a report from the Congressional Research Service. U.S. leaders have frequently used the law to restrict international transactions.

Here’s a snapshot of how presidents have used the law in the past and how Trump’s approach is unprecedented.

1) Presidents have declared 56 national emergencies invoking the act so far 

As of Aug. 1, presidents had declared 56 emergencies under the IEEPA, with 31 still ongoing. President Jimmy Carter declared the first state of emergency under this act in response to the 1979 Iran hostage crisis, in which 52 American diplomats and citizens were held hostage at the U.S. embassy in Iran. 

Carter “blocked all property and interests in property of the Government of Iran” in his first order, and later blocked the export of goods, money and credit to Iran, along with any imports from Iran to the U.S, according to Congressional Research Service. The hostage crisis also remains the longest ongoing economic emergency.

2) The IEEPA is the most commonly used emergency power

New York University School of Law’s Brennan Center for Justice, a nonpartisan law and policy institute, states that there are 123 emergency powers a president can invoke by declaring a national emergency.  

Back in May, the center found that about  90% of the national emergencies that had been declared since 1978 under the National Emergencies Act invoked the IEEPA.

3)  Congress enacted the law to rein in the president’s powers

The Congressional Research Service says that the aim of the law was to put a halt to the expansive emergency economic powers that had been granted to the president under the Trading with the Enemy Act.

Presidents used TWEA to block international financial transactions, seize assets and restrict exports, among other powers. However, Congress passed the IEEPA and the National Emergencies Act, which “included reporting requirements to increase transparency and track costs,” the CRS said.

CRS points out that some legal experts view it as a source of expansive and unchecked executive authority.

4) Trump would be the first president to use the law to try and impose additional tariffs on imported goods

While President Richard Nixon imposed such tariffs under the Trading with the Enemy Act of 1917, no U.S. leader has done so under the IEEPA.

However, back in May, Trump wanted to impose tariffs on all Mexican goods in order to halt illegal immigration.

Loyola Law School professor Jessica Levinson told Reuters while “it’s clearly beyond the spirit of the law,” it could very well be within the letter of the law.

5) National emergencies have become broader in scope 

At first, presidents would typically reference specific regions or the actions of particular governments.

President Ronald Reagan, for example, specifically targeted Nicaragua’s government in 1985 in order to weaken the left-wing Sandinistas.

However, they’ve expanded beyond geography, with presidents issuing emergencies to combat broader issues like human and civil rights abuses, slavery, and political repression, wrote the CRS.

President George H.W. Bush was the first to declare a nonspecific geographic emergency, using the law in response to the threat of chemical and biological weapons in 1990.

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