Donald Trump has not only issued orders to organize his country internally. Now he is threatening many countries with tariffs and financial pressures. (AFP File Photo)
Donald Trump has not only issued orders to organize his country internally. Now he is threatening many countries with tariffs and financial pressures. (AFP File Photo)

Why can Trump threaten the entire planet with economic sanctions?

An extraordinary legal framework allows the President to take economic measures for security reasons. Is the international pressure mechanism exhausted?

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The International Emergency Economic Powers Act (IEEPA) is a U.S. law enacted in 1977 that grants the President special powers to respond to national emergencies that pose unusual and extraordinary threats to the national security, foreign policy or economy of the United States. These powers allow for the imposition of economic sanctions, regulation of trade and restriction of financial transactions in order to protect U.S. interests.

IEEPA is activated when the President declares a national emergency under the National Emergencies Act of 1976. This declaration must be supported by the identification of a specific threat that warrants extraordinary measures. Once the emergency is declared, IEEPA allows the President: Freeze assets: block property and financial assets of individuals, entities or countries that pose a risk; Ban transactions: restrict or prevent commercial and financial transactions with certain actors; Regulate trade: impose controls on the export and import of goods and technology; and Economic sanctions: apply punitive measures against governments, companies or individuals.

The Treasury Department, through the Office of Foreign Assets Control (OFAC), plays a key role in the implementation of these sanctions and restrictive measures.

Background and case highlights

IEEPA has its roots in the Trading with the Enemy Act of 1917, which granted similar powers during wartime. However, IEEPA was designed to apply in national emergency contexts outside of wartime scenarios. Since its enactment, it has been used on multiple occasions to address a variety of threats.

An emblematic case occurred in 1979, when President Jimmy Carter used IEEPA to freeze the assets of the Iranian government in response to the hostage crisis. Another notable example is President George W. Bush's use of this law after the September 11, 2001 attacks to block funds linked to terrorist organizations.

More recently, in 2019, President Donald Trump invoked IEEPA to impose tariffs on Mexico as a pressure measure to address the migration flow into the United States. Although the tariffs were not implemented, the use of this tool generated debate about the limits of presidential power.

Scope and limits of IEEPA

IEEPA grants broad powers to the president, but also establishes certain limits and oversight mechanisms. For example, Congress may terminate an emergency declaration by joint resolution. In addition, the president must report periodically to Congress on actions taken under the act.

However, the scope of IEEPA has generated controversy, especially with regard to its potential to affect individual rights and economic freedoms. Criticism also centers on the lack of immediate judicial control over presidential decisions, which could lead to abuses of power.

IEEPA is a powerful tool that allows the president to respond quickly to emerging threats. However, its use raises questions about the balance between national security and individual rights. By freezing assets or imposing sanctions, the measures can have significant economic and diplomatic consequences, both for the United States and for the affected countries or entities.

For example, sanctions against Iran have limited its access to the international financial system, but have also generated tensions with European allies that favor a diplomatic approach. Similarly, the use of IEEPA on trade or migration issues, as in the case of Mexico, can strain bilateral relations.

How far a president can go

IEEPA offers the president a versatile tool, but it also raises concerns about the limits of executive power. While Congress has the power to oversee and, in theory, overturn an emergency declaration, in practice this is difficult to achieve due to political divisions and near unanimity in the Legislature on Trump's policies.

The scope of IEEPA also depends on how the courts interpret the president's actions. Although the judiciary can intervene in cases of abuse, judicial decisions usually come after the measures have had a significant impact.

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