BIARRITZ, France – President Trump on Saturday claimed he has the authority to make good on his threat to force all US businesses to leave China, citing a national security law that has been used primarily to target terrorists, drug smugglers and pariah states like Iran, Syria and North Korea.
When he arrived in France for the annual meeting of the 7 Powers Group, Trump posted a message on Twitter about the International Emergency Relief Act of 1977, a law originally meant to allow a president to isolate criminal regimes, not sever economic ties with an important trading partner over a tariff dispute.
The president's threat to everyone except cutting one of America's most important trade relations could disrupt a global economy already on the brink of recession in the midst of his trade war, while further disrupting giant US-dependent companies in China in its production and sale of everything from clothing to smart phones.
Mr. Trump has often come up with drastic threats as a bargaining ploy to force a partner to offer concessions, such as when he swore to close Mexico's border or impose tariffs on his goods to force measures to stop illegal immigration. But if he followed through, it would be the most important breach of China since President Richard M. Nixon's diplomatic opening to Beijing in the early 1970s.
Mr. Trump's assertion that he has the power to order U.S. companies to withdraw from China also represents the latest assertion of authority by a president who has repeatedly crossed lines that his predecessors have not. While coming into office criticizing President Barack Obama for exceeding the office of power, Trump has gone even further in creative ways to take action against his priorities.
"Any invocation of the International Emergency Relief Act under these circumstances and for these purposes would be an abuse," said Daniel M. Price, a former international economic adviser to President George W. Bush. "The act is intended to address extraordinary threats of national security and true national emergencies, not as presidential dicks."
Under the weight of Trump's customs war, China has already fallen from the United States' largest trading partner last year to the third largest this year. The United States remains China's largest trading partner. China said Friday it would raise tariffs on US goods in retaliation for Trump's recent taxes, and the president promised hours later to increase tariffs even further.
On Saturday, China's Department of Commerce issued a strongly worded statement warning the United States to return from ever-escalating confrontation, but it did not threaten any new trade measures.
"This one-sided and bullying trade protectionism and extreme pressure violates the consensus of China and US leaders, violates the principle of mutual respect, equality and mutual benefit, seriously undermines the multilateral trading system and the normal international trade order," the Chinese statement states
US business leaders in China said Saturday that forcing US companies to leave the country would hurt the competitiveness of American industry and could cause major financial losses.
"It is difficult to move out of Chin a, and at any time they are forced to do so at customs rates, this is a significant act and is not in response to efficiency, "said Ker Gibbs, President of the US Chamber of Commerce in Shanghai.
"When we see the president twitter something like that, we are unable to give up the China market – it's too big, it's too important," Gibbs said.
Business executives said that if US companies were forced by Washington to leave China, the result could be a series of fire sales at greatly reduced prices. Companies from other countries, especially in Europe, would capture the businesses that were sold, and it may be difficult for the United States to re-enter the market later.
By increasing the possibility of forcing US companies to withdraw from China on Friday, Mr. Trump framed it not as a request, but as an order he had already given.
"Our major US companies are hereby ordered to immediately start looking for an alternative to China, including bringing our companies HOME and making your products in the US," he wrote on Twitter, adding, "We do not need China, and frankly it would have been far better without them. "
In fact, the aides said, no order had been drafted, nor was it clear that he would try to do so. At the moment, they said he was trying to send a message to US companies that they should begin to disengage from China on their own.
But there was a radical shift in his assessment of President Xi Jinping in China. In the past, he has effectively praised Mr. Xi and described him as a friend, taking the Chinese leader's word that he would curb the flow of fentanyl to the United States. Over the past two days, he has accused Xi of not living up to his fentanyl pledge and described the Chinese leader as an "enemy."
Andy Mok, a trade and geopolitical analyst at the Center for China and Globalization in Beijing said the Chinese government coolly considered recent US actions.
"In negotiations, and especially in high-stakes negotiations, the emotionally responsive side is generally the side that is not doing well," he said. "The American side is approaching this from a more emotional side, while China is more calm and calculating."
The International Emergency Economic Powers Act states that if the President decides that circumstances abroad have created " some unusual and extraordinary threat" to "national security, foreign policy or economy in the United States", the President may declare a "national crisis. . "This triggers special authority for the Executive Director to regulate" any foreign transactions "of Americans. [19659004LovenblevedtattforådefinereogbegrensepresidentmaktensomtildahaddeblittsettavkritikeresomtolketforekspansivtSidenhardenfungertsomdenviktigstekildetilmyndighetforpresidentertilåsanksjonereandrelandellerenkeltpersonersomsvarpåspesifikkenasjonalesikkerhetstruslerforeksempeldeniranskegisselkrisensombegyntei1979
From 1 March, the presidents declared 54 national emergency under the law, of which 29 were still active, according to the Congressional Research Service Among other things, the presidents have used it to target international t errorists, drug king, human rights abuses, cyberattacks, illegal weapons proliferators and multinational criminal organizations.
The presidents relied on the law's authority when Iraq invaded Kuwait in 1990, when Serbia sent troops into Kosovo in 1998 and when Russia annexed Crimea in 2014. Among the countries targeting various points over the years have been international foreigners such as the North Korea, Sudan, Somalia, Yemen, Syria, Congo and Venezuela.
Seeking to use it in a trade conflict with a country like China would be a drastic departure from history. But Trump could make the argument that China, through theft of intellectual property or its military build-up in the South China Sea, poses a national security threat equivalent to cyber attacks or other non-violent attacks on the United States.
The Trump administration effectively previewed this view of Beijing in its official national security strategy released in 2017, which described China as a "revisionist power" that has "extended its power at the expense of the sovereignty of others."
Saturday was little public response to the president's latest assertion of authority. But congressional Republicans, who regard a devotion to free market principles as a defining tenet and zealously guard their jurisdiction in trade matters, have lately drawn on Trump's threats to use executive power to intervene in the economy.
In June, during a private lunch in the capital with White House leaders and administrators, Republican senators strongly opposed Trump's threat to impose new tariffs on imports from Mexico.
At the same time given their many years of experience in handling the president's whipsawing statements, especially in trade, many lawmakers have concluded that there is no upside to publicly criticizing Trump, preferring instead to try to influence him through private conversations.
Senator Charles Grassley, the Republican of Iowa and chairman of the Finance Committee, warned in a statement Friday night that Trump could hurt Americans if he slams using extra tariffs for China.
He spoke to reporters before leaving Washington for France, and made Trump clear how high his trade war with China has become for his presidency.
"This is more important than anything else we're working on," he said.
But he brushed off stock market declines in response to his statements on Friday, saying he was "not at all" responsible, and moreover, the markets had gone up significantly since taking office.
"So don't talk to me about 600 points," he said, minimizing the fall in the Dow Jones industrial average.