State of emergency in the US: Donald Trump announced that he was considering it introduction of a “national state of emergency in the economy”. In this way, he wants to provide legal justification for much of the tariffs he plans to impose on both U.S. adversaries and allies. He could do this through the International Economic Emergency Powers Act (IEEPA) of 1977, which allows the president to manage imports during a national emergency. It is unclear how Trump intends to justify its introduction.
Trump looks for a solution to tariffs: Trump used the IEEPA law already in his first term, against Mexico. In the second, it aims to reset the trade balance around the world. The decision has not been made yet, and Trump's team is still exploring other legal options that will allow the introduction of tariffs. Section 338 of the trade law allows them to cover countries that discriminate against the U.S. in trade, and Section 301 allows for tariffs on national security grounds. Trump announced tariffs on products from China, but also from Canada and Mexico. His plan to take over Greenland includes customs duties on Denmarkto force the sale of the island or its independence.
This is how the market reacted to Trump's words: “What strengthened the dollar and worsened the mood on stock markets? Yes, you guessed it – Donald Trump. CNN reported that to accelerate its tariff-raising program it intends to declare a 'national economic emergency'. I don't think anyone knows what this could mean,” wrote analyst Piotr Kuczyński on from the end of 2023.
Read also “Donald Trump 'trolls countries and the establishment'. What is the US president-elect playing at?”
Sources: : CNN, Piotr Kuczyński [X]