How Trump Plans to Increase Tariffs, and the Impact on International Relations

President Donald Trump, who was recently re-inaugurated, has been widely outspoken about his plan to impose large tariffs on goods that enter the United States from foreign countries.[1]  According to Trump during his election campaign, tariffs – which are essentially import taxes – will lower the cost of food, create more factory jobs, among other benefits throughout America.[2]  However, there is a lot that many people neither know nor understand about tariffs and their impacts.  For instance, tariffs will ensure that the price of imported products will rise, and with it the cost of competing goods, even if they are created at home.[3]  Further, Trump’s original tariffs imposed in 2018 and 2019, during his first presidential term, actually did more harm than good to manufacturing employment.[4]

Regardless of one’s personal views on tariffs and their benefits or drawbacks, the question inevitably remains of how President Trump plans to go about imposing them on foreign goods.  While Trump has not yet announced how he plans to legally impose such large tariffs, he has alluded to doing so through an executive order.[5]  Although no previous Presidents have done so before, analysts suspect that Trump may utilize the International Emergency Economic Powers Act (“IEEPA”).[6]  The IEEPA “provides the President broad authority to regulate a variety of economic transactions following a declaration of national emergency.”[7]  Trump threatened to use this act to pass tariffs on Mexican goods during his first term, which he eventually withdrew, but many argue that the scope of the IEEPA is broad enough for him to successfully use it this time around.[8]  While tariffs have generally been implemented through different trade acts, using the IEEPA to do so would allow Trump to avoid the notice-and-comment period as well as departmental reports and reviews.[9]  This act also ensures that Trump may be able to impose tariffs as soon as his first day back in office.[10]

No matter how President Trump plans to legally pass his intended tariffs, these taxes on foreign goods will undoubtedly affect global trade.[11]  After taking a serious hit during the Covid-19 pandemic in 2020, global trade has finally started to return to positive levels.[12]  However, that will likely come to a screeching halt if tariffs are actually imposed.[13]  Due to the fact that United States consumers will have to pay more for any imported goods thanks to Trump’s proposed taxes, buyers will inevitably be more motivated to buy products that are produced in the United States to avoid this.[14]  Since most companies, especially smaller ones, likely cannot afford to set up operations in America, their sales in the United States will naturally dwindle as a result.[15]  These struggles will be particularly seen in America’s neighboring countries, Mexico and Canada.[16]  Both have long been known as the United States’ leading partners in trade, and their economies depend on the United States to thrive.[17]  Although these countries were relieved to hear that Trump had not made tariffs part of his first day executive orders, he announced to reporters that same day that he still had every intention of pursuing these going forward.[18]  Now, all the United States’ international trading partners can do is wait to see the ramifications.

Maxine Bennett is a staff member of Fordham International Law Journal Volume XLVIII.

[1] Paul Wiseman, Trump favors huge new tariffs.  How do they work?, PBS News (Sept. 24, 2024), https://www.pbs.org/newshour/economy/trump-favors-huge-new-tariffs-how-do-they-work.

[2] Id.

[3] Kimberly Clausing & Maurice Obstfeld, What populists don’t understand about tariffs (but economists do), Peterson Inst. For Int’l econ. (Oct. 1, 2024), https://www.piie.com/blogs/realtime-economics/2024/what-populists-dont-understand-about-tariffs-economists-do.

[4] Id.

[5] Christopher A. Casey, Cong. Rsch. Serv., IN11129, The International Emergency Economic Powers Act (IEEPA) and Tariffs: Historical Background and Key Issues (2024).

[6] Id.

[7] Christopher A. Casey et al., Cong. Rsch. Serv., R45618, The International Emergency Economic Powers Act: Origins, Evolution, and Use (2024).

[8] Adam Looney & Elena Patel, Trump could impose tariffs on day one, with few checks on that power, Brookings (Jan. 15, 2025), https://www.brookings.edu/articles/trump-could-impose-tariffs-on-day-one-with-few-checks-on-that-power/.

[9] Id.

[10] See id.

[11] How will Trump’s tariffs affect global trade?, ICAEW Insights (Nov. 15, 2024), https://www.icaew.com/insights/viewpoints-on-the-news/2024/nov-2024/how-will-trumps-tariffs-affect-global-trade.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Matina Stevis-Gridneff et al., How Could Trump’s Tariffs Affect the U.S., Canada, and Mexico?, N.Y. Times (Jan. 21, 2025), https://www.nytimes.com/2025/01/21/world/canada/trumps-tariffs-us-canada-mexico.html.

[17] Id.

[18] Id.

This is a student blog post and in no way represents the views of the Fordham International Law Journal.