As President-elect Donald Trump prepares to assume office next Monday (January 20), news reports suggest he intends to issue approximately 100 executive orders on Monday or shortly thereafter. Given his repeated emphasis on tariffs as a policy tool during the 2024 election and the run-up to his inauguration, we expect new tariff actions to be part of this group of actions to be taken at the start of his new administration. We recap below the tariff actions threatened by President-elect Trump to date and the speed with which they may be implemented to prepare you for potential tariff-related developments which may occur next week.
Procedural Framework for Implementing Trade Remedy Tariffs – How Quickly Could New Tariffs Be Put Into Place?
The speed with which trade remedy tariffs can be imposed may differ based on the statutory authority invoked by President-elect Trump. While some tariffs require congressional approval or an investigative period by government agencies (such as the tariffs imposed in the first Trump administration), others do not. Tariffs that do not require congressional approval or investigation periods can be implemented very quickly.
Because they have few procedural requirements (and therefore can be imposed without any significant delay), we expect President-elect Trump will most likely rely upon the International Emergency Economic Powers Act (IEEPA) and/or Section 122 of the Trade Act of 1974 to impose tariffs in his second term.
International Emergency Economic Powers Act (IEEPA)
The International Emergency Economic Powers Act (IEEPA), 50 USC §§ 1701-1710, allows the President to regulate imports (including the imposition of new tariffs) once he declares a national emergency involving an “unusual and extraordinary threat” to U.S. national security, foreign policy, or its economy.
This method does not require an executive branch or Congressional investigation, report, or hearing prior to imposition of tariffs. Rather, IEEPA only requires the President to consult with Congress before imposing the tariffs and report the details of the tariff action to Congress after he has taken it — no Congressional approval is needed. While Congress retains the authority to terminate the declared national emergency by passing a joint resolution, this resolution would be subject to the President’s veto.
Historical Context and Recent Developments under IEEPA
To date, no president has imposed tariffs under the IEEPA. However, President Trump did attempt to impose tariffs on Mexico under IEEPA after declaring a national emergency on May 30, 2019 stemming from Mexico’s alleged failure to combat illegal immigration; these tariffs were set to become effective less than two weeks after the national emergency declaration was issued (on June 10, 2019). Ultimately, however, the tariffs were never implemented after the Mexican government pledged to take increased action against illegal migration through its territory.
Section 122 of the Trade Act of 1974
An alternative source of statutory authority is Section 122 of the Trade Act of 1974. Section 122 empowers the President, without congressional approval, to impose quotas and tariffs of up to 15% for up to 150 days against one or more countries that have “large and serious” balance-of-payment surpluses with the U.S. After the maximum period of 150 days, Congress must approve the continuation of the tariff, which may be extended for any desired period. To date, no president has invoked Section 122 to impose tariffs. Imports from countries with significant current account surpluses, such as China, could be potential targets for this measure.
Anticipated Actions by the Trump Administration
Given recent news coverage and President Trump’s 2019 swift tariff actions, it is likely that new tariffs will be imposed and will be effective within the first quarter of 2025 (and sooner if IEEPA and/or Section 122 are used to impose them).
What Countries Could be Targeted for Tariffs?
Based on President-elect Trump’s statements since the 2024 election, the following tariffs are under consideration:
- A universal tariff of 10-20% on all imports into the U.S. regardless of the product or origin. This is part of Trump’s broader protectionist trade policy aimed at fostering job growth, reducing the federal deficit, and benefiting domestic businesses. President-elect Trump recently dismissed rumors that his proposed universal tariffs would be limited in scope. He doubled down on his stance that all imports would be subject to the tariff. This means that if this threat is carried out, the universal tariff would apply broadly, without exceptions for specific products or countries.
- An additional 25% tariff on all articles imported into the United States from Canada and Mexico.[1] The proposed tariffs on Canada and Mexico are intended to address critical national security concerns, specifically targeting heightened levels of illegal immigration and fentanyl flows across both borders—issues President-elect Trump characterized as credible emergencies.
- An additional 10% tariff on all articles imported from China.[2] Trump maintained these tariffs are a punitive measure aimed at stopping the flow of fentanyl from China (mainly through Mexico) into the U.S.
- President-elect Trump has identified the European Union as a key focus for addressing trade imbalances. He has threatened to impose tariffs on the EU unless they increase their imports of U.S. goods, particularly oil and gas.
- BRICS countries (comprising Brazil, Russia, India, China, and countries in the Middle East and Africa) have been threatened with 100% tariffs if they try to replace the U.S. dollar with another currency.
- India and Brazil-origin goods could be assessed reciprocal tariffs since both countries have high tariffs assessed on U.S. exports.
We believe that the chances that Trump will follow through on these threats and impose the universal 10-20% tariff on all imports shortly after taking office on January 20, 2025, is high. He is likely to utilize IEEPA or Section 122. These provisions require minimal procedural steps, needing only a presidential finding or declaration.
Stay tuned for further updates as the new administration’s policies unfold.
[1] While the USMCA generally requires the U.S., Canada, and Mexico to provide entry to the goods of each party duty-free, new tariffs on Canada and/or Mexico might fall within an exception provided in the agreement for actions taken in the interest of national security. In addition, the USMCA is up for review and potential renegotiation in July of 2026 (with the review period commencing in July 2025); in light of the potential new tariffs, we expect the renegotiation process to be contentious, and for President-elect Trump to push for changes to the agreement benefitting the U.S. manufacturers such as requiring increased domestic content to obtain tariff benefits. In addition, we anticipate increased enforcement (CBP audits) on to prevent evasion of tariffs on Chinese goods passed through Mexico.
[2] This will likely be in addition to the current 7.5%-25% tariff currently levied against many Chinese-origin goods. It is unclear if Chinese inputs used in finished goods made outside of China will be impacted by the additional duties.
