President Trump’s recent threat to use emergency authority to order United States businesses to cut ties with China was brushed off and even mocked by many in a Friday tweetstorm — a move that shouldn’t be taken lightly according to one economist.
Trump fired off on Twitter, writing that American companies “are hereby ordered to immediately start looking for an alternative to China,” which followed an announcement from the country that it was raising tariffs on $75 billion in U.S. imports.
Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, said that Trump certainly has the power to make the order a reality and could do so under two statues — the Trading with the Enemy Act or the International Emergency Economic Powers Act.
In a tweet, Trump cited the International Emergency Economic Powers Act, which is a federal law authorizing the president to regulate international commerce after declaring a national emergency.
Hufbauer said the “national emergency” in question is entirely up to Trump to declare, meaning it wouldn’t be too difficult to invoke the act.
The Trading with the Enemy Act, Hufbauer said, can be invoked in times of war, including undeclared wars.
Many were quick to mock Trump’s “hereby order,” with political figures like California U.S. Rep. Adam Schiff, a frequent critic of Trump, tweeting Friday, “As long as we are claiming constitutional powers we don’t have, I hereby order the President to stop tweeting.”
But Hufbauer said, “It’s not something to brush off lightly. I can see in the middle of next year, he might invoke one of these statutes on the way to the White House during the election.”
The consequences of Trump’s order would harm major companies like General Motors or Microsoft that won’t be able to use their research and development for Chinese markets, Hufbauer said.
He added that the order would be “very discombobulating” for supply chains that rely on Chinese imports.
The silver lining, however, would be “sections of the American business community on the edge of being competitive with China and they will be able to get orders and produce with a higher price,” Hufbauer said.
Trump’s retaliatory action Friday has sparked widespread outrage from the business community.
“It’s impossible for businesses to plan for the future in this type of environment,” David French, senior vice president for government relations at the National Retail Federation, said in a statement.
China’s Commerce Ministry issued a statement Saturday condemning Trump’s threat, saying, “This kind of unilateral, bullying trade protectionism and maximum pressure go against the consensus reached by the two countries’ heads of state, violate the principles of mutual respect, equality and mutual benefit, and seriously damage the multilateral trading system and normal international trade order.”
Herald wire services contributed to this report.
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