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Trump Asserts He Can Force U.S. Companies to Leave China Ahead of G7, Trump Asserts He Can Force U.S. Companies to Leave China
(about 2 hours later)
BIARRITZ, France — President Trump asserted on Saturday that he has the authority to make good on his threat to force all American businesses to leave China, citing a national security law that has been used mainly to target terrorists, drug traffickers and outlier states like Iran, Syria and Libya. BIARRITZ, France — President Trump asserted on Saturday that he has the authority to make good on his threat to force all American businesses to leave China, citing a national security law that has been used mainly to target terrorists, drug traffickers and pariah states like Iran, Syria and North Korea.
As he arrived in France for the annual meeting of the Group of 7 powers, Mr. Trump posted a message on Twitter citing the International Emergency Economic Powers Act of 1977, a law originally passed as part of a congressional effort to define and restrain presidential assertions of power not to enable a president to cut off economic ties with a trading partner because of a disagreement over tariffs. As he arrived in France for the annual meeting of the Group of 7 powers, Mr. Trump posted a message on Twitter citing the International Emergency Economic Powers Act of 1977 — a law meant to enable a president to isolate criminal regimes but not intended to be used to cut off economic ties with a major trading partner because of a disagreement over tariffs.
“For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977,” Mr. Trump wrote. “Case closed!”“For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977,” Mr. Trump wrote. “Case closed!”
Mr. Trump called on Friday for American companies to cut ties with Beijing after the Chinese government said it would raise tariffs on American goods in retaliation for new levies on $300 billion worth of Chinese imports. The president’s tweet could further unsettle American companies that still conduct an enormous amount of business with China amid a trade war that has already strained ties. Stock markets fell sharply on Friday after Mr. Trump first raised the prospect of cutting off trade altogether.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing our companies HOME and making your products in the USA,” Mr. Trump tweeted, adding, “We don’t need China and, frankly, would be far better off without them.” The threat came after the Chinese government said it would raise tariffs on American goods in retaliation for the latest levies imposed by Mr. Trump on $300 billion in Chinese imports. Mr. Trump vowed hours later to raise tariffs further.
Mr. Trump’s threat to invoke the 1977 act to force companies to leave China would be his most recent unorthodox use of standby authorities that Congress delegated to the presidency for exigent circumstances. The president previously threatened to use those emergency powers to impose tariffs on Mexican goods, unless the Mexican government did more to stop migrants from illegally entering the United States. Under the weight of Mr. Trump’s tariff war, China has already fallen from America’s largest trading partner last year to the third largest this year.
The president’s tweet could further unsettle American companies that conduct an enormous amount of business with China, one of the United States’ largest trading partners. Stock markets fell sharply on Friday after Mr. Trump first raised the prospect of cutting off trade altogether. China’s commerce ministry issued a strongly worded statement on Saturday evening warning the United States to turn back from ever-escalating confrontation, but it did not threaten any new trade measures.
His effort to use the emergency powers could also be challenged in court, given the restrictions surrounding when it can be invoked. The International Emergency Economic Powers Act says that if the president decides that circumstances abroad have created “any unusual and extraordinary threat” to “the national security, foreign policy, or economy of the United States,” the president can declare a “national emergency.” This triggers special authority for the leader to regulate “any transactions in foreign exchange” by Americans. “This unilateral and bullying trade protectionism and extreme pressure violate the consensus of the heads of state of China and the United States, violate the principle of mutual respect, equality and mutual benefit, seriously undermine the multilateral trading system and the normal international trade order,” the Chinese statement said.
China warned that the United States would suffer as a result.
“The Chinese side strongly urges the U.S. side not to misjudge the situation, not to underestimate the determination of the Chinese people, and immediately stop the wrong approach, otherwise all consequences will be borne by the U.S.,” the statement added.
In raising the possibility of forcing American businesses to pull out of China on Friday, Mr. Trump framed it not as a request but as an order he had already issued.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing our companies HOME and making your products in the USA,” he wrote on Twitter, adding, “We don’t need China and, frankly, would be far better off without them.”
In fact, aides said, no order has been drawn up nor was it clear that he would attempt to do so. Instead, it could be the latest negotiating tactic by a president who favors drastic threats without always following through on them in hopes of forcing partners to make concessions.
Andy Mok, a trade and geopolitics analyst at the Center for China and Globalization in Beijing, said that the Chinese government was coolly assessing the latest American actions.
“In negotiations, and especially in high-stakes negotiations, the side that reacts emotionally generally is the side that does not do well,” he said. “The U.S. side is approaching this from a more emotional side, while China is more calm and calculating.”
Mr. Trump’s threat to invoke the 1977 act to force companies to leave China would be his most recent unorthodox use of authorities that Congress delegated to the presidency for exigent circumstances.
The president previously threatened to use emergency powers to impose tariffs on Mexican goods, unless the Mexican government did more to stop migrants from illegally entering the United States. He backed off after Mexico promised to take tougher action.
His effort to use emergency powers could also be challenged in court, given the restrictions surrounding when it can be invoked.
The International Emergency Economic Powers Act says that if the president decides that circumstances abroad have created “any unusual and extraordinary threat” to “the national security, foreign policy, or economy of the United States,” the president can declare a “national emergency.” This triggers special authority for the leader to regulate “any transactions in foreign exchange” by Americans.
The law was passed to define and restrain presidential power, which until then had been seen by critics as interpreted too expansively. It has served ever since as the main source of authority for presidents to sanction other countries or individuals in response to specific national security threats, such as the Iranian hostage crisis that began in 1979.
As of March 1, presidents had declared 54 national emergencies under the law, of which 29 were still active, according to the Congressional Research Service. Among others, presidents have used it to target international terrorists, drug kingpins, human rights abusers, cyber attackers, illegal arms proliferators, and multinational criminal organizations.
Presidents relied on the law’s authority when Iraq invaded Kuwait in 1990, when Serbia sent troops into Kosovo in 1998 and when Russia annexed Crimea in 2014. Among the countries targeted at various points over the years have been international outliers like North Korea, Sudan, Somalia, Yemen, Syria, Congo and Venezuela.
Seeking to use it in a trade dispute with a country like China would be a drastic departure from its history. But Mr. Trump could make the argument that China’s theft of intellectual property constitutes a national security threat akin to cyber attacks or other nonviolent attacks on American sovereignty.
Mr. Trump came to office criticizing President Barack Obama for abusing his executive authority but has himself asserted new and creative ways of taking action that his predecessors never used.
Among other things, he invoked a related national emergency law to finance parts of his proposed wall along the Mexican border even though Congress explicitly refused to authorize the money. So far, Mr. Trump has successfully rebuffed legal challenges to that decision.
Speaking with reporters before leaving Washington for France, Mr. Trump made clear how much of a priority his trade war with China has become for his presidency.
“This is more important than anything else that we’re working on, just about,” he said.
But he brushed off the stock market drop in reaction to his statements on Friday, saying he was “not at all” responsible and, besides, the markets had gone up substantially since he took office.
“So don’t talk to me about 600 points,” he said, minimizing the drop in the Dow Jones industrial average.
Mr. Trump’s meetings in Biarritz could be tense given the economic uncertainty and his many policy differences with his global counterparts. The American president has become such a dissenter from the international consensus that President Emmanuel Macron of France, the host, has decided even not to bother trying to craft a single joint statement for the first time in the history of the summit.
“This is another G7 summit which will be a difficult test of unity and solidarity of the free world and its leaders,” Donald Tusk, the president of the European Union, told reporters in Brussels.
“There is still no certainty whether the group will be able to find common solutions, and the global challenges are today really serious, or whether to focus on senseless disputes among each other.”
He warned against further economic conflict.
“Trade deals and the reform of the W.T.O. are better than trade wars,” he said, referring to the World Trade Organization. “Trade wars will lead to recession while trade deals will boost the economy.”
After landing in Biarritz, Mr. Trump had lunch with Mr. Macron and the two put on a friendly show for reporters.
“We will be allies, friends,” Mr. Macron said.
Mr. Trump insisted that he and Mr. Macron “actually have a lot in common” and “have been friends a long time.”
“Once in a while we go at it just a little bit,” he added, “not very much.”