How Trump Could Unilaterally Place Tariffs on Mexico and Canada

They are allied countries with which the U.S. has a trade deal (a deal negotiated by Trump, no less), but presidential emergency powers are nearly limitless.

During his first term in office, President Donald Trump oversaw the renegotiation of a continent-wide trade deal that he hailed as "the fairest, most balanced, and beneficial trade agreement we have ever signed into law. It's the best agreement we've ever made."

As part of that deal, the United States-Mexico-Canada Agreement (USMCA), the three countries agreed that they would not "increase any existing customs duty, or adopt any new customs duty" beyond the tariffs and duties outlined in the agreement.

Five years after he signed it, however, Trump seems to have little regard for that provision of the USMCA. He's now threatening to slap a general tariff on all imports from America's two neighbors and two largest trading partners. During an impromptu press conference in the Oval Office on Monday, Trump said those tariffs could be in place as soon as February 1.

Calling this an unprecedented maneuver is an understatement. Trump is threatening to start a trade war with two American allies, in direct violation of a trade deal that he signed just five years ago. If it's not a bluff, these tariffs would be economically damaging to all three North American economies. If it is, then it is an unnecessary bit of saber-rattling that serves only to undermine a deal that, again, Trump had signed and praised.

If he decides to follow through on the threat, however, Trump almost certainly has the power to do so. Here's how.

First, the USMCA itself is not a serious impediment. Any trade deal is ultimately only as good as all the signatories' willingness to abide by it—and the hypocrisy of tearing up his own agreement is apparently not enough to stop Trump. Additionally, the deal included a clause, Article 32.2, guaranteeing each country the right to apply new tariffs for "the protection of its own essential security interests." If Trump sets up his tariffs as a national security issue, the U.S. could claim the USMCA allows it.

That's convenient for Trump, because he'd likely also have to invoke a national emergency on the domestic side of things.

The most straightforward way for a chief executive to impose new tariffs without congressional approval or a lengthy review process—which would be required if Trump used Section 301 of the Trade Act of 1974, as he did in his first term to impose tariffs on China—would be to invoke the International Emergency Economic Powers Act (IEEPA). That law, passed by Congress in 1977, gives the president broad and virtually unchecked power to regulate international trade while confronting "any unusual and extraordinary threat" to American "national security, foreign policy, or economy."

Since its passage, the IEEPA has been invoked 84 times, and 42 of those national emergencies are still active—mostly involving sanctions on various countries that are decidedly not U.S. allies. The IEEPA has never been used to impose tariffs. (However, President Richard Nixon used a precursor to the IEEPA to set 10 percent universal tariffs in 1971.)

Even though it's never been used that way before, even critics of Trump's tariff plans admit the IEEPA could be used to invoke them. "Aside from minor reporting and consultations with Congress, moreover, the only serious check on IEEPA authority is the requirement that the president declare an emergency pursuant to the NEA, which can be done at any time," the Cato Institute's Scott Lincicome and Clark Packard wrote in October.

But, wait, does such an emergency exist? Canada's and Mexico's status as close U.S. allies and trading partners (and signatories to a trade deal that includes the U.S.) would seem to preclude the notion that either could be appropriately labeled a national security or economic threat, much less an "unusual and extraordinary" one, right?

That probably doesn't matter. The open-ended nature of the IEEPA gives presidents "wide discretion in defining both the threat and the actions that the President finds necessary to deal with the circumstances of the emergency," explained Thomas Beline and James Ransdell, a pair of attorneys at a trade-focused law firm in Washington, D.C., in a September blog post.

Could Congress intervene to block an emergency declaration or to prevent Trump from using the IEEPA to impose tariffs? Probably not. Once the IEEPA has been invoked, the law requires only that presidents "consult" with Congress about the steps to be taken.

Congress does have the power to override national emergencies with a joint resolution, but getting a veto-proof majority in both chambers seems unlikely. No national emergency has been terminated without the president going along, and some recent attempts at undoing long-running "emergencies" have attracted little support in Congress.

The Trump administration would likely have to defend this use of the IEEPA in court, but the law has fair prospects of surviving a legal challenge. Beline and Ransdell argue that "any legal challenge might ultimately be deemed by a reviewing court to be a political question and one that the judiciary would not second-guess."

Recent history seems to confirm that. Judges were reluctant to get involved when Trump levied new tariffs on steel and aluminum imports during his first term, even though the "national security" rationale underpinning those actions was virtually nonexistent. Asking the Supreme Court to block a national security declaration or Trump's use of that declaration to impose tariffs would be a Hail Mary play.

We may be nearing the end point of a decadeslong trend that saw Congress offload its constitutional authority over trade policy to the chief executive, while simultaneously handing over virtually unchecked and vaguely defined emergency powers. Given the accumulation of those powers within the executive branch, it may have been inevitable that a president would eventually put the two together.

Some will argue that Trump's tariff threats against Mexico and Canada should not be taken too seriously, and that they are merely a starting point for the next round of negotiations over the USMCA. Under the terms of the deal, officials from all three countries are supposed to review it (and potentially make changes) in 2026.

There are a few problems with that logic. First, Trump has explicitly denied that's what he's trying to do. Perhaps more importantly: By setting a precedent of ignoring the plainly stated terms of the existing deal, Trump seems likely to undermine the long-term stability of the USMCA, even if he's able to negotiate productive changes next year.

After all, why should Canada and Mexico believe him the next time he proclaims a deal to be the "best agreement" ever?