How Trump Could Use a National Emergency Declaration to Impose 25% Tariffs on Canada
With less than two weeks until Donald Trump returns to the White House, uncertainty surrounds how the Republican leader plans to implement his ambitious tariff agenda. Greta Peisch, former general counsel for the Office of the U.S. Trade Representative, believes Trump may rely on the International Economic Emergency Powers Act (IEEPA) to impose tariffs.
“When you look at the president-elect’s focus on linking tariff actions to issues like fentanyl and border security, he hasn’t clarified the authority he would use. However, IEEPA seems most applicable,” Peisch explained.
IEEPA, a national security statute, grants the U.S. president authority to regulate economic transactions after declaring a national emergency. While the Nixon administration once used its predecessor, the Trading With The Enemy Act, to briefly impose a 10% tariff on all imports, no president has used IEEPA to implement tariffs.
“It would be a novel addition to the tariff toolbox,” Peisch said.
Trump previously threatened to use IEEPA during his first term, vowing to impose 5% tariffs on Mexico unless it addressed border security and illegal immigration. That scenario was avoided when a deal was struck, and the tariffs were never implemented.
Reports suggest Trump and his team are now exploring the declaration of an economic emergency to leverage IEEPA. Other tools are also under consideration, including provisions in the Trade Act of 1974, which facilitated tariffs on China during his first administration, and the Trade Expansion Act of 1962, used to target Canadian steel and aluminum.
The Canada-U.S.-Mexico Agreement (CUSMA), negotiated during Trump’s first term, provides no protection from such measures. According to Peisch, the agreement allows countries to take actions deemed essential for their national security.
After his election victory, Trump reiterated threats of broad tariffs on Mexico and Canada, linking the measures to border security concerns. He suggested imposing tariffs would be one of his first executive actions upon taking office.
Prime Minister Justin Trudeau and Finance Minister Dominic LeBlanc met with Trump at Mar-a-Lago last year to discuss the proposed duties. Shortly after, LeBlanc unveiled a $1.3-billion border security package. However, Trump’s threats remain unresolved.
“We don’t have tariffs on them yet, but that will happen,” Trump warned about Canada.
Trump escalated tensions by proposing Canada should join the U.S. as its 51st state, threatening to use “economic force” to achieve this goal. Trudeau dismissed the idea, saying there’s “not a snowball’s chance in hell” Canada would agree.
Meanwhile, Canadian officials are bracing for potential tariffs. Foreign Affairs Minister Mélanie Joly emphasized the importance of preparation, noting Ottawa’s readiness to impose retaliatory tariffs targeting U.S. goods like steel, ceramics, plastics, and orange juice.
Federal and provincial leaders have also appeared on American media to highlight the adverse effects of tariffs on U.S. consumers and businesses.
Wolfgang Alschner, an expert in international economic law at the University of Ottawa, described the situation as economic coercion. He noted that the magnitude of the proposed tariffs and their connection to border security exceed traditional trade threats.
“We’re witnessing the use of economic tools to achieve non-economic policy objectives. This is the definition of economic coercion,” Alschner said.
He stressed that retaliatory tariffs alone would be insufficient. Canada must work toward solutions addressing U.S. economic security concerns, resolve trade irritants, and rebuild bilateral relations.
“This situation is highly volatile, and it’s imperative we avoid letting it spiral out of control,” he cautioned.
