Tariffs are a source of great contention, oftentimes triggering legal battles. On February 2025, President Donald Trump signed executive order imposing tariff on several good imported from Canada, Mexico and Chinese. Aggressive tariff measures were levied upon the grounds of protecting domestic industries and national security. However, the legality of these measures regarding their compliance with U.S. law and international agreements is questionable. A prominent concern is invoked under the International Emergency Economic Powers Act, permitting a trade restriction, raising questions about the boundaries of executive authority and possible abuse of the exceptions on grounds of national security. The study will assess Trump tariffs with respect to international trade agreements and U.S. trade laws and its impact on global trade governance.

HISTORICAL BACKGROUND OF TRUMP’S NATIONAL SECURITY TARIFFS

The Trump administration used Section 232[1] of the Trade Expansion Act (1962) to impose tariffs on imports on grounds of national security. In 2018, a 25% tariff on steel and a 10% tariff on aluminium were imposed, levying taxes on major trading partners such as China, Canada, Mexico, and the EU. These tariffs caused WTO disputes and retaliations. Further, the administration-imposed tariffs on Chinese goods barring unfair economic practices under Section 301[2] of the Trade Act (1974) on grounds that led to the Phase One trade deal in 2020 which resolved some trade tensions. China agreed to IP protections and increased U.S. purchases under it, with some tariff reductions but not enough to finally settle trade tensions. Tariffs were also imposed on washing machines and solar panels.

In 2019, Trump-threatened 5% tariffs under the International Emergency Economic Powers Act (hereinafter mentioned as IEEPA) on Mexican imports to stop illegal immigration but withheld them after Mexico agreed to prevent illegal crossings by having stricter law enforcement.

TRUMP’S RECENT ACTIONS

On February 2025, former President Donald Trump signed executive orders putting in place a 25% tariff on every good imported from Canada and Mexico, with the 10% tariff imposed on Canadian oil and energy products, in addition to another 10% tariff imposed on a slew of Chinese goods. IEEPA justified the measures taken to combat illegal immigration and the opioid crisis-fentanyl trafficking that the administration classified as a national emergency[3].

DETAILED ANALYSIS OF INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT, 1977

Origins and Use of the IEEPA

The International Emergency Economic Powers Act (IEEPA) of October 28, 1977, provided the U.S. president with authority to control economic transactions, impose sanctions, and freeze assets in reaction to extraordinary foreign threats. It requires a declared national emergency under the National Emergencies Act, subject to annual renewal. IEEPA is primarily used for sanctions and export controls.

IEEPA was passed to curb the broad emergency powers presidents exercised under Section 5(b) of the Trading with the Enemy Act (TWEA) of 1917[4], which had originally been used for wartime economic controls but later extended to peacetime measures, such as Roosevelt’s 1933 bank holiday and Cold War export restrictions. It has since become a key tool for sanctions, export controls, and financial restrictions.

A Congressional Research Service report[5] noted that no prior president had used IEEPA for tariffs, as national security-related tariffs have historically been imposed under Section 232 of the Trade Expansion Act of 1962[6], which mandates an investigation. Nonetheless, the Trump administration used IEEPA for tariffs, raising legal debates.

Under IEEPA Section 203[7], the president can regulate economic transactions only after declaring a national emergency, subject to annual renewal. The recent applications of IEEPA include sanctions on Russia (2022), restrictions on U.S. investment in China, and bans on Chinese internet-connected cars and bulk data transfers. While some legal scholars argue that IEEPA grants excessive presidential power, others see it as a necessary tool for swift economic and foreign policy action.

Judicial Oversight of IEEPA’s Evolving use

The Courts have broadly upheld IEEPA, allowing the president vast authority over economic sanctions and emergency actions. In Dames & Moore v. Regan (1981)[8], the Supreme Court held that IEEPA, just as its predecessor TWEA Section 5(b), authorises the president vast power over international economic transactions. However, courts have imposed some limits. In 1981, the Supreme Court ruled in INS v. Chadha[9] that Congress cannot simply vote to cancel a president’s actions under IEEPA. Instead, Congress would have to pass a new law to block the president’s decision. However, since the president can vetonew laws, Congress would need a two-thirds majority in both the House and Senate to override the veto—making it much harder to stop IEEPA actions.

In the 2000s, courts ruled that asset freezes under IEEPA must comply with the Fourth Amendment protections against unreasonable searches and seizures[10]. In Trump’s 2020 attempts to ban TikTok[11] and WeChat[12], courts blocked the actions, ruling that IEEPA did not authorize bans on Chinese-owned social media apps. More recently, in 2024, the Fifth Circuit found that IEEPA’s definition of “property” did not extend to immutable smart contracts on a blockchain[13]. This decision was influenced by the Supreme Court’s Loper Bright ruling (2024)[14], meaning courts now determine the “best” interpretation of a statute rather than deferring to executive agencies. These cases signal that while courts have historically deferred to the president on IEEPA matters, they are beginning to scrutinize its expanding use more closely.

IEEPA and Tariff Authority: A Legal Gray Area or Justifiable Power?

Challenging the Use of IEEPA for Tariffs

Trump’s plan to impose broad tariffs may lead U.S. courts to decide whether the IEEPA allows a president to do so. Even though IEEPA has never been used for tariffs, Trump and his advisers view it as a legal alternative because it has fewer procedural challenges than traditional trade laws. For example, President Biden used IEEPA to efficiently impose sanctions on Russia after its invasion of Ukraine, whereas Trump’s first tariffs on China took nearly a year under Section 301 of the Trade Act of 1974^[15].

Unlike other trade laws that target specific countries or products, IEEPA could allow Trump to impose a universal tariff of 10% or 20% on all imports within days. Courts have historically given presidents broad discretion under IEEPA, so they could rule in Trump’s Favor. However, critics argue that using IEEPA for tariffs contradicts its intended purpose and bypasses Congress’s usual trade oversight. This concern is especially relevant to Trump’s universal tariff, which could face legal issues under the Supreme Court’s “major questions doctrine,” requiring courts to closely examine scrutinize in detail important executive actions.

The Major Questions Doctrine restricts executive authority when an action with significant economic or political consequences lacks clear congressional approval. If Trump attempts to impose global tariffs under IEEPA, courts may rule that Congress never intended IEEPA to authorize such tariffs. Since IEEPA has historically been used for sanctions and not trade measures, the Supreme Court may even block Trump’s tariffs for exceeding presidential authority.

Congressional Authority and IEEPA’s Limits on Tariff Power

The Constitution confers Congress with the power to set tariffs and regulate foreign commerce (Article 1, Section 8)[16] and the president’s authority to impose tariffs comes from congressional delegation. IEEPA provides the president with broad powers under 50 U.S.C. However, the law does not explicitly mention tariffs or taxes, a significant omission given that other trade laws clearly reference tariff powers. Despite nearly five decades of IEEPA’s use, no president has ever used it to impose tariffs, implying that Congress never intended IEEPA to serve as a basis for such kind of authority. If Congress approves the tariffs, no further action is required to maintain them. However, if Congress does not approve, it can respond by passing a joint resolution under the National Emergencies Act to end the national emergency or amend IEEPA to restrict its use for imposing tariffs.

The report of the Committee on International Relations (1977)[17] on IEEPA did not state that Congress intended to authorize tariffs. Instead, it highlighted key TWEA powers related to foreign exchange, property regulation, and asset control. The only mention of tariffs was historical, referencing Nixon’s 1971 tariffs under TWEA and the Yoshida ruling that upheld them due to a national emergency. Moreover, while Yoshida was still in litigation, Congress passed Section 122 of the Trade Act of 1974[18], explicitly authorizing temporary tariffs for balance of payments issues but with strict limits. This suggests that when enacting IEEPA, Congress had already addressed tariff authority separately and imposed clear restrictions.

The Yoshida Decision and Its Limited Relevance to IEEPA

In United States v. Yoshida International (1975)[19], the court upheld President Nixon’s 1971 temporary 10% tariff under Section 5(b) of TWEA, ruling that TWEA’s broad delegation of power included the ability to regulate imports through tariffs. However, applying Yoshida to IEEPA is problematic. Even though the IEEPA’s Section 1702 mirrors TWEA’s language, Congress enacted IEEPA to limit presidential emergency powers. The House report on IEEPA emphasized that its scope was purposefully narrower than TWEA, making it debatable whether Yoshida’s reasoning applies to IEEPA.

Furthermore, the Yoshida court opined that it would not have ratified a long-term, universal tariff like the one Trump has proposed. The court noted that Nixon’s 1971 tariff was not a universal 10% tariff but rather a selective adjustment of rates on specific goods, ensuring that total tariffs never exceeded a statutory maximum. It explicitly intended the measure to be temporary, using it as a short-term economic tool rather than a permanent trade policy change. The court found that this approach was inherently different from a president imposing tariffs at any rate he deemed fit without congressional approval. Since IEEPA’s enactment in 1977, no president has used it to impose tariffs, and there is little precedent to suggest that any tariffs imposed under IEEPA today would be similarly limited in scope or duration.

The Major Questions Doctrine and Presidential Tariff Power

The major questions doctrine states that presidents cannot make significant policy changes using vague or outdated laws unless Congress has explicitly granted them that authority. The Supreme Court has recently applied this doctrine in major cases. In West Virginia v. EPA (2022)[20], the Court ruled that the EPA could not use old laws to impose broad climate regulations. In Biden v. Nebraska (2023)[21], it struck down Biden’s student loan forgiveness plan, stating that Congress had not clearly authorized such a sweeping policy change.

Trump’s proposed 10–20% universal tariff marks a major policy shift, generating billions in taxes while raising consumer costs. Courts may find IEEPA lacks clear congressional authorization for such tariffs. Additionally, the absence of a judicial principle to distinguish between tariffs of varying scope strengthens the argument that tariff authority rests with Congress, not the president.

DISPUTE INITIATED BY MEXICO AND CANADA IN 2018 BEFORE THE WTO

In 2018, WTO disputes were initiated by Canada (WT/DS550)[22] and Mexico (WT/DS551)[23] against the U.S. tariffs imposed on steel (25%) and aluminium (10%) under Section 232 of the Trade Expansion Act of 1962. This is an important precedent relevant to recent tariff actions by President Donald Trump and their use of national security justifications for trade restrictions.

Mexico and Canada’s Legal Claims Against the U.S.

Both Mexico and Canada argued that the U.S. tariffs infringed multiple WTO agreements as follows:

1. Violation of Safeguard Agreement (GATT Article XIX[24] & Agreement on Safeguards):  The U.S. measures act as safeguard tariffs without following proper WTO procedures as they did not justify the tariffs as a response to “unforeseen developments” or provide any proof that imports were harming domestic industries. They failed to conduct proper investigations, notify affected countries, or offer an opportunity for compensation.
2. Most-Favoured Nation Principle (Article I of GATT 1994[25]): The U.S. provided exemptions to certain countries but not to Mexico and Canada, violating the rule that all WTO members must be treated equally in trade.
3. Violation of Tariff Commitments (Article II of GATT 1994[26]): The U.S. imposed import duties that exceeded the rates it previously committed to under its WTO agreements.
4. Restraint on Import (Article XI of GATT 1994[27]): By setting quotas and other limits on steel and aluminium imports, the U.S. effectively restricted trade beyond what is allowed under WTO rules.
5. Lack of Transparency and Fair Administration (Article X of GATT 1994[28]): Mexico and Canada argued that the U.S. had not administered the tariffs fairly or consistently, making them unpredictable and unfair.
6. Noncompliance of General WTO Compliance (Article XVI of the WTO Agreement[29]): U.S. had failed to ensure that its domestic trade laws were in align with its WTO obligations.
7. Legality of Section 232 of the U.S. Trade Expansion Act[30] : Mexico and Canada questioned the legality of Section 232 of the U.S. Trade Expansion Act of 1962, the law that the U.S. used to justify the tariffs. They argued that this law allowed the U.S. to impose trade restrictions for economic reasons rather than genuine national security concerns, making it inconsistent with WTO rules.

Rejection of U.S. National Security Justification

The U.S. attempted to justify these tariffs under Article XXI(b) of GATT 1994[31], which allows trade restrictions on the basis of national security. Mexico and Canada argued, that these tariffs were imposed primarily for economic reasons and not for national defense. Since the U.S. had taken into account factors like economic well-being in order to impose the tariffs, Mexico and Canada argued that they did not represent legitimate national security actions. The case is significant as it calls into question the legitimacy of U.S. Section 232 tariffs and its potential abuse for economic protection rather than on legitimate grounds of security

Mutually Agreed Solution

On 23 May and 28 May 2019, Canada and Mexico respectively, reached an agreement with the United States and informed the Dispute Settlement Body (DSB) of a mutually agreed solution, which involved the removal of some tariffs that the U.S. imposed on steel and aluminium products. On 11 July 2019, the Panel circulated its reports, which under Article 12.7 of the Dispute Settlement Understanding (DSU)[32] provided a brief description of the cases and confirmed the solutions reached.

WTO Ruling and Its Implications for Trump’s 2025 Tariffs

The WTO’s national security decision becomes highly relevant in the present as trump is planning new tariffs in 2025. It restricts the wide application of security justifications, as seen in past disputes over steel and aluminium tariffs. If Trump’s new tariffs are invoked on security grounds, they could be legally challenged, potentially leading to WTO disputes and retaliatory measures. However, with previous U.S. resistance to WTO rulings, enforcement is far from certain.

THE US FENTANYL CRISIS: A PROBLEM THAT TARIFFS CANNOT FIX

The WTO encourages free trade with principles such as Most-Favoured-Nation (MFN) treatment and tariff binding. The Trump administration’s unilateral tariffs on Canada, Mexico, and China are against these standards by imposing discriminatory tariffs. These tariffs do not pass the WTO exceptions (Articles XX and XXI of GATT 1994) since they are not supported by adequate evidence of necessity for public health or national security. The US should settle disputes through the WTO and not through unilateral measures, which can lead to international trade disputes and undermine the US economy.

The fentanyl crisis cannot be solved by tariffs as it does not acknowledge its root causes which are regulatory loopholes and domestic demand. It takes multilateral effort to enhance chemical regulation and counter trafficking for a lasting solution.

POLICY RECOMMENDATIONS ADDRESSING TARIFFS IN COMBATING THE FENTANYL CRISIS

To address the fentanyl crisis, tariffs are not effective and can have economic disadvantages. A multifaceted approach through international coordination, domestic reform, and focused enforcement is required.

Restrict Presidential Tariff Power: Congress must revise law such as the IEEPA and Section 232 of the Trade Expansion Act of 1962 to establish explicit boundaries of presidential tariff power. This includes deciding when national security can be cited and keeping economic problems from being cited as security threats.

Expand WTO Compliance: Tariffs must adhere to WTO standards, including Most-Favoured-Nation (MFN) treatment and tariff binding obligations. Prohibit unnecessarily discrimination and resolve disputes using WTO tools like discussion and arbitration to prevent retaliation and promote international trade stability.

Reassess IEEPA’s Function in Trade: IEEPA, once used for sanctions and embargoes, should not be broadly applied for trade actions. Legislative safeguards should be in place to prevent abuse, with its utilization conforming to its original intent. Judicial review should provide assurance that actions under IEEPA adhere to the “unusual and extraordinary threat” standard.

Identify Tariff Limitations: Tariffs control legitimate commerce but do not stop illegal commerce such as fentanyl trade, which criminal organizations carry out outside legitimate frameworks. Imposing tariffs could complicate diplomatic relations, rendering international coordination of fentanyl control difficult. The U.S. must work with other countries to break fentanyl-manufacturing and distribution networks by sharing intelligence, resources, and enforcement strategies.

Mitigate Economic Consequences: Tariffs increase the expense of conducting business and for the consumer, proportionally impacting lower-income families. Tariffs may destabilize the supply chain, drive up production costs, and lead to unemployment. Policymakers need to balance these economic costs before mandating new tariffs.

Strengthen Domestic Policies: Strengthen legislation to monitor and control chemicals used in the production of fentanyl to prevent diversion into the illegal market.

CONCLUSION

In order to address the challenges posed by unilateral tariffs and their ramification for both international trade and the fentanyl crisis a strategic approach is required. Tariffs serve as a tool of economic policy, however their misuse may violate WTO commitments, increasing trade tensions, and adversely impacting domestic industries and consumers. The United States Should strengthen its commitment to multilateral dispute resolution mechanisms and ensure that presidential tariff authority remains within clearly defined legal boundaries to prevent any kind of abuse of power.

Furthermore, tariffs are of no use in combating illegal activities like fentanyl trafficking, as they do not address the root causes of the crisis. A more effective approach could involve in the strengthening of international cooperation and domestic enforcement as well as implementing targeted policy reforms to curb the production and distribution of fentanyl with limited adverse economic impact.

Through focusing on WTO compliance, responsible trade policymaking, and holistic approaches to combating illegal drug trade, the U.S. can protect economic stability while also promote more effective approaches to national and global challenges.

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[1] Trade Expansion Act of 1962, § 232, 19 U.S.C. § 1862, https://www.law.cornell.edu/uscode/text/19/1862

[2] Trade Act of 1974, § 301, 19 U.S.C. § 2411, https://www.law.cornell.edu/uscode/text/19/2411

[3] White House, Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico, and China (Feb. 1, 2025), https://www.whitehouse.gov

[4] Trading with the Enemy Act, ch. 106, § 5(b), 40 Stat. 411 (1917)

[5] Christopher A. Casey, The International Emergency Economic Powers Act (IEEPA) and Tariffs: Historical Background and Key Issues, CONG. RSCH. SERV. (Feb. 20, 2020), https://crsreports.congress.gov/product/details?prodcode=IN11129.

[6] Trade Expansion Act of 1962, § 232,

[7] International Emergency Economic Powers Act, Pub. L. No. 95-223, § 203, 91 Stat. 1625, 1626 (1977)

[8] Dames & Moore v. Regan, 453 U.S. 654 (1981), https://supreme.justia.com/cases/federal/us/453/654/

[9] INS v. Chadha, 462 U.S. 919 (1983), https://supreme.justia.com/cases/federal/us/462/919/

[10] KindHearts for Charitable Human Development v. Geithner, 647 F. Supp. 2d 857 (N.D. Ohio 2009), https://casetext.com/case/kindhearts-for-charitable-human-devel-v-geithner.

[11] TikTok Inc. v. Trump, 507 F. Supp. 3d 92 (D.D.C. 2020), https://casetext.com/case/tiktok-inc-v-trump-1.

[12] U.S. WeChat Users Alliance v. Trump, 488 F. Supp. 3d 912 (N.D. Cal. 2020), https://casetext.com/case/us-wechat-users-alliance-v-trump.

[13] Van Loon v. Department of the Treasury, No. 23-50669 (5th Cir. Nov. 26, 2024), https://law.justia.com/cases/federal/appellate-courts/ca5/23-50669/23-50669-2024-11-26.html.

[14] Loper Bright Enterprises v. Raimondo, 600 U.S. ___ (2024), https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf.

[15] Trade Act of 1974, 19 U.S.C. § 2411.

[16] U.S. CONST. art. I, § 8

[17] H.R. Rep. No. 95-459, at 1 (1977),https://www.justsecurity.org/wp-content/uploads/2024/04/IEEPA-House-Committee-on-International-Relations-report_1977-copy_clean.pdf

[18]Trade Act of 1974, Pub. L. No. 93-618, § 122, 88 Stat. 1978, 1988–89,https://www.congress.gov/bill/93rd-congress/house-bill/10710/text

[19] United States v. Yoshida Int’l, Inc., 526 F.2d 560 (C.C.P.A. 1975),https://casetext.com/case/united-states-v-yoshida-intern-inc

[20] West Virginia v. Environmental Protection Agency, 597 U.S. (2022), https://www.supremecourt.gov/opinions/21pdf/20-1530_n758.pdf

[21] Biden v. Nebraska, 600 U.S. 477 (more) 143 S. Ct. 2355,https://www.supremecourt.gov/opinions/22pdf/22-506_nmip.pdf

[22] World Trade Organization, United States—Certain Measures on Steel and Aluminium Products, WT/DS550 (June 6, 2018), https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds550_e.htm

[23] World Trade Organization, United States—Certain Measures on Steel and Aluminium Products, WT/DS551 (June 5, 2018), https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds551_e.htm

[24] General Agreement on Tariffs and Trade 1994, art. XIX, Apr. 15, 1994, 1867 U.N.T.S. 187, https://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm#articleXIX

[25] General Agreement on Tariffs and Trade 1994, art. I Apr. 15, 1994, 1867 U.N.T.S. 190,

[26] General Agreement on Tariffs and Trade 1994, art. II, Apr. 15, 1994, 1867 U.N.T.S. 190, https://www.wto.org/english/docs_e/legal_e/gatt47_01_e.htm.

[27] General Agreement on Tariffs and Trade 1994, art. XI, Apr. 15, 1994, 1867 U.N.T.S. 190, https://www.wto.org/english/docs_e/legal_e/gatt47_01_e.htm

[28] General Agreement on Tariffs and Trade 1994, art. X, Apr. 15, 1994, 1867 U.N.T.S. 190, https://www.wto.org/english/docs_e/legal_e/gatt47_01_e.htm

[29] General Agreement on Trade in Services, art. XVI, Apr. 15, 1994, 1869 U.N.T.S. 183, https://www.wto.org/english/docs_e/legal_e/gatt47_01_e.htm

[30] Trade Expansion Act of 1962, § 232, 19 U.S.C. § 1862, https://www.law.cornell.edu/uscode/text/19/1862

[31] General Agreement on Tariffs and Trade 1994 (GATT 1994), Article XXI(b), https://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm#articleXXI

[32] World Trade Organization, Understanding on Rules and Procedures Governing the Settlement of Disputes, art. 12.7 (1994), https://www.wto.org/english/tratop_e/dispu_e/dsu_e.htm

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Author: Malika Nath

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