Two sources familiar with the matter said that Trump was expected to invoke the International Emergency Economic Powers Act (IEEPA) as the legal basis for the tariffs, declaring a national emergency over fentanyl overdoses that killed nearly 75,000 Americans in 2023 and illegal immigration.
The statute, enacted in 1977 and modified after the 9/11 attacks in 2001, gives the president broad powers to impose economic sanctions in a crisis.
Among the trade law tools at Trump’s disposal, IEEPA would give him the fastest path to imposing broad tariffs, as others require lengthy investigations by the Commerce Department or the US Trade Representative’s office.
Trump’s nominees to run those agencies, Wall Street CEO Howard Lutnick and trade lawyer Jamieson Greer, have not been confirmed by the US Senate. Trump used IEEPA to back up a 2019 tariff threat against Mexico over border issues.
MAJOR DISRUPTION
Imposing the duties would tear up a 30-year free trade system that has built a highly integrated North American economy, with auto parts sometimes crossing borders several times before final assembly.
Economists and business executives have warned that the tariffs would spark major increases in the prices of imports such as aluminum and lumber from Canada, fruits, vegetables, beer and electronics from Mexico and motor vehicles from both countries.
Tariffs are paid by firms that import goods and pass the costs on to consumers or accept lower profits, economists say.
“President Trump’s tariffs will tax America first,” said Matthew Holmes, public policy chief at the Canadian Chamber of Commerce. “From higher costs at the pumps, grocery stores and online checkout, tariffs cascade through the economy and end up hurting consumers and businesses on both sides of the border. This is a lose-lose.”
Canada has drawn up detailed targets for immediate tariff retaliation, including duties on orange juice from Florida, Trump’s adopted home state, a source familiar with the plan said. Canada has a broader list of targets that could reach C$150 billion worth of US imports, but would hold public consultations before acting, the source said.
Canada’s energy and national resources minister, Jonathan Wilkinson, said Canada’s response would focus on products that hurt Americans more than Canadians.
