On Liberation Day, President Trump held up what most economists correctly thought was a rather silly reciprocal tariff chart. Armed with that chart and under the cover of the International Emergency Economic Powers Act (IEEPA) of 1977, Trump then imposed reciprocal tariffs on most of the world’s other countries.
To pass the legal smell test, actions taken by the president under the IEEPA must be in response to an “unusual and extraordinary” foreign threat to our national security. Does the U.S. trade deficit pose a foreign threat? Hardly. The U.S. has incurred a trade deficit each and every year for the past 50 years, and those deficits have never posed a threat to America’s national security. Indeed, trade deficits have become routine.
