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It appears that Donald Trump really wants a centrally planned economy, where the government directs companies what to buy, what to sell, and what to build. Like the one China has. Sure, that’s, you know, “socialism,” but Republicans are craven hypocrites who support Trump for his bigoted ideology and deep misogyny. Economic theories were always just a mask for these guys, and Trump’s continued Republican support despite his unhinged economic ravings proves the point.
But can Trump have a centrally planned economy? Last week, Trump tweeted: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” that drew predictable derision from literate non-Republicans. Later in the week, Trump tweeted something about the International Emergency Economic Powers Act, which sent lawyers (including me) scrambling to figure out how he derived authoritarian central economic planning from a provision of American Law.
It’s always a risk to apply normal standards of judicial interpretation to the Republican Supreme Court, but let’s try to break this down.
The International Emergency Economic Powers Act (IEEPA) is a 1977 law designed to give the President broad powers to direct economic levers against our foreign enemies in times of crisis. It’s important to understand that the IEEPA was written to constrain the President’s use of these powers to “emergencies.” Previously, the President’s powers to control the private economy were regulated by the Trading With The Enemies Act of 1917 (TWEA). That thing gave the President broad powers in times of war, but had been interpreted to be applicable in peace time, as well. The “Cuban Embargo” is enforced mainly through the Trading with the Enemy Act, for instance.
Obviously, we’re not at “war” with Cuba, we just don’t like them. By the late 70’s it became clear that the TWEA was being used by Presidents because they didn’t like this or that regime, as opposed to only during the case of open, violent hostilities. The IEEPA was meant to constrain that use of economic authoritarianism to “emergencies” instead of mere disagreement, while still giving the President leverage to punish enemies who we were nonetheless “at peace” with.
If an emergency exists, the IEEPA gives the President extraordinary economic powers.
(1) At the times and to the extent specified in section 1701 of this title, the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise—
(A) investigate, regulate, or prohibit—
(i) any transactions in foreign exchange,
(ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof,
(iii) the importing or exporting of currency or securities,
by any person, or with respect to any property, subject to the jurisdiction of the United States;
(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States;
In one of his most famous opinions, Dames & Moore v. Regan, former Chief Justice William Rehnquist upheld this incredible grant of power. The IEEPA is expansive and it allows the President nearly limitless control over the economy, should an emergency be declared.
The question is not whether the President can “hereby order” private American companies to stop doing business in China. He almost certainly can. The issue is whether the President can will an international economic emergency into existence based only on his say so.
We’ve asked that question before. Trump’s purported “use” of the National Emergencies Act to build his Wall presents the same problem. No emergency exists, but if Trump says one does, is that enough? Here, the IEEPA specifies:
The authorities granted to the President by section 1702 of this title may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for any other purpose.
Again, the IEEPA was written to STOP Presidents from using draconian economic powers to punish enemies by Presidential whim. China existing is not “unusual” or “extraordinary.” Trump picking a fight with China is unusually and extraordinarily stupid, but that’s not what this law means when it contemplates an international emergency. The Rehnquist opinion authorizing such use of economic powers was written in the context of the Iran hostage crisis. The IEEPA is used, frequently, to ban companies and non-profits from doing business with suspected state-sponsors of terrorism. Trump trying to get China to do what Trump wants is not an “emergency” by any reasonable reading of this statute.
Will it matter to Roberts? This is a guy who allowed Trump’s Muslim ban. This is a Court which might in fact allow Trump to steal money not authorized by Congress to build his bigoted metaphor across the Southern Border, under the guise of a “national emergency.” If you trust this Supreme Court to have more fealty to the law than to Trump, you simply haven’t been paying attention.
I don’t want to sound like George Will, but this is all Congress’s fault. Congress has, for decades and decades, been ceding its power to the executive branch, because it does not want to make difficult, politically charged decisions about international hot spots. You see it here, you see it with the National Emergencies Act, you see it with the Patriot Act. Congress, at an institutional level, would rather let the President do what he wants, then bitch and moan about it later when it’s politically convenient, instead of using its Article I powers to STOP the President during a politically charged moment.
Congress should not give these “emergency” powers to the President, without clearly defining “emergency,” without automatic sunset provisions, and without the escape hatch of a legislative veto via simple majority. To that last point, we should also amend the Constitution to overrule the Supreme Court’s disastrous decision in INS v. Chadha, so that the legislative veto is once again a thing.
If we learn one thing from the Trump Era… well, that one thing should be “electing a racist con-man because he promises to be racist has consequences.” And then we should learn that Republicans can never be trusted because their entire political philosophy is a mere dog-whistle for the racism of their base. But if we learn THREE things from the Trump Era, let the third thing be to stop writing laws that require “good faith” on the part of the President of the United States. We are a weak and stupid people. Now that Trump has opened the Pandora’s Box on these powers, he will not be the last to use them.
Elie Mystal is the Executive Editor of Above the Law and a contributor at The Nation. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. He will resist.