FX168 Financial News (Asia-Pacific) reported that CNN, on Wednesday (January 8), local time, reported that four informed sources told CNN that the elected President of the USA, Donald Trump, is considering declaring a "National Economic Emergency" to provide a legal basis for imposing widespread tariffs on allies and adversaries. Trump is seeking to reset the Global trade balance during his second term.

(Screenshot source: CNN)

This statement will allow Trump to use the International Emergency Economic Powers Act (IEEPA) to formulate a new tariff plan. IEEPA unilaterally authorizes the President of the USA to manage imports during the declared national emergency.

One of the sources noted that Trump favors this law because it grants broad jurisdiction over how to implement tariffs without strictly requiring proof that the tariffs are based on National Security considerations.

Another source familiar with the matter stated, "Nothing is impossible." He acknowledged that there has been extensive discussion about declaring a national emergency.

In response to the above news, Trump's transition team did not respond to CNN's request for comment.

In 2019, Trump threatened to impose a 5% tariff on all imports from Mexico under IEEPA, stating that if Mexico did not take action to reduce the number of illegal immigrants entering the USA, the tariff would increase to 25%.

Sources told CNN that no final decision has been made yet on whether to declare a national emergency.

Reports state that the Trump team is still exploring other legal avenues to support the tariff ideas proposed by Trump during the campaign.

Kelly Ann Shaw, a trade lawyer who previously served as Trump's Deputy Assistant for International Economic Affairs, said: "I believe the president has broad powers to impose tariffs for various reasons, and there are many legal bases for doing so. IEEPA is certainly one of them."

CNN reported that Trump's advisors are assessing the possibility of using Section 338 of the USA Trade Law. This provision allows the president to impose "new or additional tariffs" on countries deemed to discriminate against USA businesses. In these cases, trade law allows the president to impose new tariffs on specific product categories from these countries as a direct response—although this has been untested in recent history.

Additionally, Trump's advisors are considering revisiting the trade law known as Section 301.

Reports indicate that if Trump opts to declare a national economic emergency, it could take effect soon, and it is currently unclear what evidence he would cite.

Supporters of tariffs argue that they are crucial for promoting USA manufacturing.