The Emergency Economic Powers Act Gives President Trump A Lot Of Leeway

The Emergency Economic Powers Act, signed into Law in 1977, gives President Trump a lot of leeway. Yesterday, President Trump, in response to further Chinese escalation of their trade war against the United States, “hereby ordered” U.S. businesses to leave China. Predictably, the left wing press, virtually en mass, shrieked “He can’t do that!” However, in and amongst the strident cries of “dictator!” and “tyrant!,” came an article surprisingly, from today’s Washington Post saying essentially, “Not so fast.”

Trump does not have the authority to “duly order” companies to leave China, according to Jennifer Hillman, a Georgetown University law professor and trade expert at the Council on Foreign Relations.

But under the law he cited, Trump can prevent future transfers of funds to China, she said. First, he would have to make “a lawful declaration that a national emergency exists,” she said.
Congress could terminate the declaration if it wishes, she said.

“Moreover, even if all this happened, it would not provide authority over all of the U.S. investments that have already been made in China,” Hillman said.

Professor Hillman is partially correct, likely because like many on the left (Georgetown Law Professor, need I say more?) she takes everything literally.

My understanding of the 1977 Legislation may or may not support an Executive Order for U.S. companies to leave China. It does however, plainly and fully support such orders prohibiting any transfer of goods, services or money. That means The President can effectively and with the stroke of a pen, stop all commerce between the United States and China.

Will he go that far? Unlikely—and here’s why. A short while ago, I penned a short piece where I counted coup on a prediction I had made earlier regarding China and the movement of U.S. firms from there to more salubrious climes. My take, is that despite all the wailing and gnashing of teeth, The President’s “order” is merely going to be an incentive to accelerate an ongoing process. Again, from the Washington Post article

Businesses from retail to electronics to home goods, many already under pressure from a months-long U.S.-China trade war, were contacting their industry associations for guidance and awaiting more substantive announcements from the White House.

“I’m trying to keep my cool and not get worried and upset, but it’s becoming hard,” said Magi Raible, founder of LiteGear Bags, a luggage maker based in Vallejo, Calif.

She has a meeting next week with an industry colleague to discuss moving more of her manufacturing from China to India or South Africa, she said.

And finally, emphasis mine

I don’t know how much faster I can move or how much more urgency I can have,” she said.

“I don’t know how much faster I can move.” And she isn’t the only CEO thinking that. China is in a very bad spot right now. I’m not sure that Xi is aware of just how bad. At this point, there is no way for China to win here. As I pointed out in that other piece, once U.S. businesses sign contracts, move to new locales and most importantly, retool and upgrade to latest technology, they will be very averse to going back to a proven hostile environment using out of date technology. The only decision Xi should be making is, how much pain is he willing to inflict on the real decision makers who allow him to remain in power? The longer he waits, the more painful this will be.

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Mike Ford, a retired Infantry Officer, writes on Military, Foreign Affairs and occasionally dabbles in Political and Economic matters.

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