President Donald Trump has threatened to impose a new 50 percent tariff on goods from countries that provide arms to Iran, but top economic advisers are unanimous on how the President could accomplish this.
Kevin Hassett, director of the White House National Economic Council, suggested Thursday morning that the president could use the 1977 emergency law, despite the fact that the Supreme Court had ruled in February that the statute does not authorize tariffs.
“It’s clearly within the president’s tariff power, that if we are in a conflict situation, that’s exactly what the IEEPA policy is designed for,” Hassett said on Fox Business with Maria Bartiromo, using the acronym for the International Emergency Economic Powers Act. “Countries should be really careful. If you’re helping our adversary, President Trump will notice and he’ll take action.”
But U.S. Trade Representative Jamieson Greer shot down that idea just hours later, telling POLITICO at a stop in Michigan that the legislation could be used to “restrict” some trade — with sanctions — but “not so much for tariffs.”
“You can have the same impact as a prohibitive tariff with IEEPA,” Greer said, noting that other tariff authority is available and that he is “still reviewing options with the President” for imposing a 50 percent tariff.
Asked about Hassett’s comments, a White House official said, “The President has a wide range of executive powers, including through IEEPA, to protect our national security. The Administration is exploring all available tools to ensure that both Americans and the world are safe from any terrorist threat.” The official, who was granted anonymity to discuss the administration’s strategy, did not immediately respond to a follow-up question about Greer’s comments.
The comments came a day after Trump posted on social media that he would “immediately” impose massive tariffs on any country that supplies military arms to Iran, saying the duties would have “no exclusions or exemptions.”
The Supreme Court ruled on Feb. 20 that IEEPA does not authorize the president to impose tariffs without congressional approval, voiding double-digit duties set by the White House on goods from dozens of countries last year.
The Trump administration had argued the law, which allows the president to regulate economic activity during national emergencies, should be read to include tariff authority by relying on earlier wartime precedents when presidents exercised broad control over the economy, even though the US was not at war when Trump imposed his duties.
The court rejected that argument, stating that “it was not persuaded that the dots connect to our wartime precedents … such that IEEPA should be interpreted to grant the President a broad peacetime tariff power,” and concluded that “the Court’s historical argument based on its wartime precedents fails.”
But the judges did not directly address whether IEEPA would have worked differently in an actual wartime scenario.
That could leave a narrow legal window open during an active conflict, said Ed Gresser, a former USTR economist now at the left-leaning Progressive Policy Institute. Graesser cautioned that the doctrine would be difficult to implement in the current situation, however, adding that the administration has not sought congressional approval for the use of force to attack Iran in the past five weeks. He said, “I don’t understand how they can combine this with the claim that, because we are in a conflict situation, the administration can use IEEPA to impose tariffs.”
Peter Harrell, a White House economic adviser under former President Joe Biden, was also skeptical. He said, “I’m sure if Trump actually tried to impose tariffs here, he would be tied up in litigation for quite some time, and I suspect the government would prevail.”
The Trump administration could also try to use other trade laws to justify 50 percent tariffs on countries that sell arms to Iran, although this would also be a legal ramifications and would not be immediate.
“It would actually be better for them to have restrictions here that are clearly permitted by law,” Harrell said.
The Trump administration has already begun rebuilding its tariff regime following the court decision, including setting a flat 10 percent tariff using Section 122 of the Trade Act of 1974, which allows tariffs of up to 15 percent for 150 days to address “large and serious” balance of payments deficits. Two groups have already challenged those duties in court.
Greer has also initiated new investigations under Section 301 of the Trade Act of 1974 that could lead to tariffs on dozens of countries, and is expected to impose additional territory-based tariffs under Section 232 of the Trade Expansion Act of 1962.
Daniel DesRochers contributed to this report.
