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story.lead_photo.caption French President Emmanuel Macron (left) and first lady Brigitte Macron greet British Prime Minister Boris Johnson on Saturday at the summit in Biarritz, France.

BIARRITZ, France -- President Donald Trump asserted Saturday that he has the authority to make good on his threat to force all U.S. businesses to leave China, citing a national security law that has been used mainly to target terrorists, drug traffickers and pariah states such as Iran, Syria and North Korea.

As he arrived in France for the annual meeting of the Group of Seven powers, Trump posted a message on Twitter citing the International Emergency Economic Powers Act of 1977, a law originally meant to enable a president to isolate criminal regimes, not sever economic ties with a major trading partner over a tariff dispute.

"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," Trump wrote. "Case closed!"

The act gives presidents wide berth in regulating international commerce during times of declared national emergencies. Trump threatened to use those powers earlier this year to place tariffs on imports from Mexico in a bid to force the U.S. neighbor to do more to address illegal crossings at their shared border.

It was not immediately clear how Trump could use the act to force American businesses to move their manufacturing out of China and to the U.S. Trump has not declared an emergency with respect to China.

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"Any invocation of the International Emergency Economic Powers Act in these circumstances and for these purposes would be an abuse," said Daniel Price, who was an international economic adviser to President George W. Bush. "The act is intended to address extraordinary national security threats and true national emergencies, not fits of presidential pique."

Under the weight of the trade war, China has fallen from America's largest trading partner last year to the third-largest this year. The United States remains China's largest trading partner. China said Friday that it would raise tariffs on U.S. goods in retaliation for Trump's latest levies, and Trump vowed hours later to increase tariffs even further.

China's Commerce Ministry issued a statement Saturday warning the United States to turn back from escalating the conflict, but it did not promise additional trade measures.

"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 statement said.

U.S. business leaders warned that forcing companies to leave China would hurt the competitiveness of American industry and cause heavy financial losses.

"It's difficult to move out of China, and any time they are forced to do so by tariffs, this is a momentous act," said Ker Gibbs, president of the American Chamber of Commerce in Shanghai. "We are in no position to give up the China market -- it's too large, it's too important."

The president's threat to all but cut off one of America's most important trading relationships amid the trade war could disrupt the global economy while further unsettling companies in the United States that rely on China in their production of items such as clothing and smartphones.

"It's impossible for businesses to plan for the future in this type of environment," David French, senior vice president for government relations at the National Retail Federation, said in a statement.

The trade association CompTIA stressed the logistical strain that would follow if companies were forced to shift operations out of China, saying it would take months for most companies.

"Any forced immediate action would result in chaos," CEO Todd Thibodeaux said in emailed comments.

PRESIDENTIAL POWERS

Under the International Emergency Economic Powers Act, a president can declare a "national emergency" in case of "any unusual and extraordinary threat" to "the national security, foreign policy, or economy of the United States" from abroad. This triggers special authority for the president to regulate "any transactions in foreign exchange" by Americans.

The law was passed to define and restrain presidential power, which until then had been interpreted expansively under the Trading with the Enemy Act of 1917. The 1977 law has since served as the main source of authority for presidents to impose sanctions on 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 emergencies under the law, of which 29 were still active, according to the Congressional Research Service. Presidents have used it to target international terrorists, drug kingpins, human-rights abusers, cyberattackers, illegal-arms proliferators and multinational criminal organizations.

Presidents invoked the law 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 have been international outliers such as North Korea, Sudan, Somalia, Yemen, Syria, Congo and Venezuela.

John Smith, a partner at the international law firm Morrison & Foerster, said the law had never been used for pure economic warfare without a national security nexus, adding it could be challenged in court or by Congress.

"In the 20 years I've been doing this, I have not seen anything where there was not a national security threat," said Smith, who until last year was director of the Treasury Department's Office of Foreign Assets Control, which enforces the emergency-powers law. "This is a completely different use of a well-utilized tool in going after what appears to be a purely economic dispute."

But even if it's an unprecedented stretch of the law, some international trade lawyers said it was written broadly enough that Trump could prevail.

"The statute gives the president the right to do just about anything if he or she first declares that here's a national security threat to the United States," said Judith Alison Lee, a lawyer at Gibson Dunn in Washington. "It would be hugely disruptive but, technically speaking, I think the statute gives him that authority."

William Reinsch, an international business scholar at the Center for Strategic and International Studies, said he did not think the act would allow Trump to order U.S. companies to leave China, but that he might be able to block future investments, freeze Chinese assets and exclude Chinese financial institutions from the U.S. financial system.

ECONOMIC TALKS

Tension over the global economy was likely to shadow Trump's meetings with leaders at the Group of Seven summit in France this weekend. Donald Tusk, president of the European Council, warned Saturday against "senseless disputes" and further economic conflict.

"Trade deals and the reform of the WTO 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."

During a special meeting today about the state of the global economy, which was requested by the White House, Trump plans to use the forum to tout his economic record and criticize several allies for their slowing growth, according to senior administration officials who briefed reporters on the condition of anonymity.

The gathering will include leaders of all Group of Seven countries -- the United States, Japan, Canada, Italy, Germany, France and the United Kingdom.

Trump plans to again call out Germany for its trade practices, below-average defense spending and partnership with Russia on a gas pipeline, one official said. Trump will take on France for seeking to impose a "highly discriminatory" digital-service tax that targets U.S. companies, another official said.

During a lunch Saturday, French President Emmanuel Macron told Trump that the leaders needed to work on "how to decrease tensions and fix the situation in terms of trade." He also discussed the global economic slowdown, saying Europe needs "some new tools to relaunch our economy."

While Macron has sought to organize the Group of Seven around issues such as global inequality and development in Africa, Trump plans to use the gathering to press his "America first" agenda on trade and economic growth, officials said.

Shortly after the lunch, some senior administration officials said they were frustrated with how the French were handling the summit. Speaking on the condition of anonymity to talk frankly, two U.S. officials said they believed Macron was focusing on issues such as climate change, gender inequality and development in Africa to cater to his own domestic politics.

Trump's administration wants more focus on trade and the economy, the officials said.

One senior administration official offered a contrary view, saying the talks had been positive and constructive.

A French official denied reports of diplomatic tensions with the United States over the summit. The official, who spoke on the condition of anonymity to avoid escalating any conflict with the U.S. delegation, said leaders couldn't avoid discussing issues such as climate change at the summit.

In addition to the session on the economy, Trump is scheduled to discuss trade and other issues during bilateral meetings with the prime ministers of the United Kingdom, Japan and Canada today.

Information for this article was contributed by Peter Baker and Keith Bradsher of The New York Times; by Zeke Miller and Rachel Lerman of The Associated Press; and by Toluse Olorunnipa, Damian Paletta, Josh Dawsey and Michael Birnbaum of The Washington Post.

Photo by AP/ANDREW HARNIK
President Donald Trump and French counterpart Emmanuel Macron greet each other Saturday before a dinner at the Group of Seven summit in Biarritz, France.

A Section on 08/25/2019

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Archived Comments

  • JakeTidmore
    August 25, 2019 at 6:25 a.m.

    Do Americans really, really want to give future Presidents the power to control US businesses on the basis of a whim? Citizens better stand up against the tyrannical Trump on this issue. Look at what happened to countries that continued to give in to the demands of a tyrannical leader.
    --
    The pettiness of Trump and his aides shows up near the end of this article: "....they believed Macron was focusing on issues such as climate change, gender inequality and development in Africa to cater to his own domestic politics.

    Trump's administration wants more focus on trade and the economy, the officials said."
    --
    Climate change - the world is melting or on fire due to climate - is the biggest factor affecting world economics. Gender inequality is a huge economic factor worldwide. Africa's future is the world's future.
    Trump's tariff tit-for-tat tiff with China is a manufactured crisis that is backfiring on Trump and the US economy. Trump's disapproval rating is at 62%.
    --
    Dump Trump 2020!!! Sic semper tyrannis. It's time to end the Trump nightmare!!

  • RBear
    August 25, 2019 at 6:52 a.m.

    So, it appears Trump is the socialist by slowly creating an economy managed by the state under a dictatorial control. Trump has abused emergency powers acts for things the acts were never intended to be used for. His small cadre of co-conspirators in the WH have been attempting to use anything they can to destroy our country and economy for their own purposes.
    ...
    Trump continues to demonstrate to the American public why he is unfit for the office. If he were to invoke the emergency powers to dictate what businesses do, we will have descended into an economy VERY similar to the ones he has accused Democrats of.

  • Waitjustaminute
    August 25, 2019 at 7:06 a.m.

    Jake, the answer to your question is no, we don't, which means we never should have in the first place. The executive branch, and by extension the administrative state, has become far too powerful, and that's not a new development. Those of you who applauded the 'phone and a pen' approach of the last president have no right to be shocked now. I'm thinking of an old expression about sauce, a goose and a gander. Its not just a Trump problem, its a systemic problem. And it will never get fixed under our current hyper partisan times.

  • RBear
    August 25, 2019 at 8:01 a.m.

    WJAM a bit of "whataboutism" going on this morning? Where's LRCrook to chastise you on your comments. Actually, in this case Congress gave the office of the president powers to use in case of dire emergencies that threatened our country in times of conflict and crisis. Bush invoked them several tims to combat terrorists by seizing their assets. They have also been imposed regarding human rights violations many times before, probably in overreach. But, before all the Trump nuts try to attack others about that, he has invoked them for those purposes himself.
    ...
    But, let's look at what Trump is proposing here. In invoking the powers to this level he would completely destabilize the US and world economies by cutting off key suppliers to our nation that cannot be replaced even in his presidency if he were to get a second term, which would be highly unlikely if he takes this action.
    ...
    Trump likes to brag about the fact that China is paying the tariffs and the money that is coming into the Treasury as a result of them. In reality, Americans are paying those tariffs and essentially paying an indirect tax, cutting into the tax cut claims that Trump has made. With this next round of tariffs, the ones who will pay the most will be the average consumer. Fox Business recently noted that the US has collected $59 billion this year and that number will probably exceed $100 billion if the next round hits during the Christmas season, which Trump has threatened after China imposed its recent tariffs.
    ...
    Add to that the rise in prices overall as some supply chains shift, the impact to farmers from the tariffs, and the downstream effect of the current tariffs as they finally hit the consumer leg of the supply chain and any "benefit" from the tax cut has been negated. Now Trump is floating ideas to cut the payroll tax, pressure the Fed to lower rates without economic justification, and even consider cuts to social security and Medicare to cover defense spending (the highest in the world) and the cuts.
    ...
    There is no strategy by this president on trade. It is strategy by tweet with no real thought on the impact. Trump bragged yesterday about the stock market, trying to diffuse the impact of the last two significant drops. But if the drops continue which they did going into the Great Recession, his claim that we have to vote for him if we value our 401Ks will be shallow claims that any Democrat can point to during a debate.

  • PopMom
    August 25, 2019 at 8:31 a.m.

    Trump is just crazy and is destabilizing the world. It is one thing to negotiate trade changes in a thoughtful and deliberate manner, but he is just insulting other countries and changing policy on a whim. I hope the soybean farmers start uniting to replace this kook, and I hope that taxpayers realize that we are having to subsidize the farmers for these erratic actions. While the Courts may eventually find that Trump does not have the authority to make such an order, the economy becomes unstable in the process.

  • Waitjustaminute
    August 25, 2019 at 8:31 a.m.

    RBear, show me where in my comment where I lifted one finger to take up for Trump. Again I say he needs to shup up. But it's not 'whataboutism' to point out that we have a bigger problem than just Trump. You say Trump is THE problem; I say he's the product of a bigger problem. You say "they have also been imposed regarding human rights violations . . . probably in overreach." We agree on the "overreach" part. Each successive administration overreaches more than the last one. Focusing only on Trump won't prevent whoever comes next from overreaching yet again. Which is why I argue that we need to make systemic changes to the power of the executive branch.
    - - - - - - - -
    We're having the same disagreement we had on the deficit the other day. Then, I was focusing on the whole problem which goes back many years and administrations, while you singularly focused on the Trump tax cuts for our fiscal problems. In both areas - the federal debt and executive overreach - we are in dire need of an engine overhaul. You seem to think replacing the starter will suffice. It won't.

  • Waitjustaminute
    August 25, 2019 at 8:32 a.m.

    Shut up, not "shup up." Or ship up or shape up. Take your pick.

  • RBear
    August 25, 2019 at 8:44 a.m.

    WJAM, so you're saying we get rid of the emergency powers act to solve the problem. Actually, that's not a good idea, but we need someone who doesn't abuse it for the wrong reasons. Trump can't get what he wants on trade issues, so he'll invoke an emergency act to do it. So, yes I'm saying get rid of the current office holder who is abusing the powers for the wrong reasons. EOs can be blocked, but most of Obama's were not so divisive or skirted the legal lines to be blocked. Trump's orders have crossed the line several times and have been blocked by the courts. That's a good example of abuse of power.
    ...
    If Trump does go through with this order, hopefully it will be challenged in court and successfully blocked as several others are.

  • WhododueDiligence
    August 25, 2019 at 8:47 a.m.

    "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," Trump wrote. "Case closed!"
    !
    Case closed????????
    !!
    Case closed?
    So there?
    That's final?
    Nuff said?
    End of story?
    That's all she wrote?
    Game, set and match?
    Next?
    I'm the decider?
    No room for debate?
    Because I said so?
    I alone can fix it?
    I hereby order?
    I have spoken?
    Don't confuse me with the facts?
    Checks and balances?
    Constitution?
    What Constitution?
    My way or else?
    Bwaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa?

  • WGT
    August 25, 2019 at 8:56 a.m.

    Trump is a failure at using economic policy positively. He preys on a disadvantage, wreaks egotistical pomp on a dreamed up slight, beats his chest, and sloshes out gibberish to consternate, makes a royal mess of common sense, then walks away as if he were a GD saint. Screw him, his gaslit base supporters, and get this sick man the real help he needs.

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