G-7 summit

Trump eases up on threat to force US businesses to leave China

"Actually we're getting along very well with China right now. We're talking. I think they want to make a deal much more than I do." said United States President Donald Trump.
"Actually we're getting along very well with China right now. We're talking. I think they want to make a deal much more than I do." said United States President Donald Trump.PHOTO: AFP

BIARRITZ (France) • United States President Donald Trump seems to have backed off on his threat to force all US businesses to leave China, even as experts questioned whether this would constitute an appropriate use of powers granted under an emergency law.

Asked yesterday about whether such a move was indeed on the cards, he demurred. "Well, I have the right to. If I want, I could declare a national emergency," Mr Trump said at the beginning of consultations with world leaders at the Group of Seven summit.

But he added: "Actually we're getting along very well with China right now. We're talking. I think they want to make a deal much more than I do."

A day earlier, he had 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. "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," Mr Trump wrote on Saturday.

If he were to follow through, it would be the most significant break with China since then President Richard Nixon's diplomatic opening to Beijing in the early 1970s. But even if it never comes to that, the threat itself could still have a long-lasting impact on relations with China and perhaps embolden hardliners in Beijing pressing President Xi Jinping to take a more confrontational approach to the US.

It would also be an audacious assertion of power by a president who has repeatedly crossed lines his predecessors did not. "Any invocation of the International Emergency Economic Powers Act in these circumstances and for these purposes would be an abuse," said Mr Daniel Price, who was an international economic adviser to former president George W. Bush. "The act is intended to address extraordinary national security threats and true national emergencies, not fits of presidential pique."

In raising the possibility of a US pullout last Friday, Mr Trump framed it not as a request but as a dictate he had issued. "Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing our companies home and making your products in the USA," he wrote on Twitter. In fact, aides said, no order has been drawn up nor was it clear one would be.

 
 
 
 

But it accompanied a radical shift in Mr Trump's assessment of Mr Xi. In the past, he has praised the Chinese leader as a friend, taking him at his word that he would buy US soya beans and stem the flow of the drug fentanyl to the US. In the last two days, Mr Trump has accused Mr Xi of not living up to his promises and called him an "enemy".

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 US" 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. It has served ever since 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, cyber attackers, illegal arms proliferators and multinational criminal organisations.

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 were North Korea, Sudan, Somalia, Yemen and Syria.

Using it in a trade dispute with a country like China would be a drastic departure. But Mr Trump could make the argument that China constitutes a national security threat through the theft of intellectual property or its military build-up in the South China Sea.

But some lawyers said it was written broadly enough that Mr 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 Ms Judith Alison Lee, a lawyer at Gibson Dunn in Washington.

NYTIMES

 
A version of this article appeared in the print edition of The Straits Times on August 26, 2019, with the headline 'Trump eases up on threat to force US businesses to leave China'. Print Edition | Subscribe