What legal tools can Trump use to force US firms out of China?

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President Trump Possesses Several Legal Tools to Compel US Firms to Reduce or Cease Operations in China

President Trump has several legal avenues available to encourage or compel US companies to divest from China. These tools range from further tariff increases to more direct executive actions under existing legislation. The International Emergency Economic Powers Act (IEEPA) offers significant authority to block company activities or economic sectors, particularly if framed as a national emergency. Additionally, restrictions on federal procurement contracts could be used to penalize companies with Chinese operations.
Further Tariff Increases

The President can continue to escalate tariffs on Chinese goods, thereby increasing the cost of doing business in China for US companies. This strategy aims to diminish the profitability of operating in China to a point where it is no longer economically viable. For instance, tariffs on nearly US$250 billion of Chinese imports were already increased by 5 percentage points to 30 percent, effective October 1, 2019. Planned tariffs on an additional US$300 billion of consumer goods were also set to rise from 10 percent to 15 percent, with phased implementation dates in September and December 2019.
Declaring a National Emergency Under IEEPA

The International Emergency Economic Powers Act (IEEPA) of 1977 provides a framework for the President to declare a national emergency and subsequently block the activities of specific companies or entire economic sectors. By citing issues such as intellectual property theft as a national emergency, the administration could direct US companies to cease certain transactions, including the purchase of Chinese technology products. Past presidents have utilized IEEPA to freeze assets of foreign governments, such as former President Jimmy Carter's actions against Iranian government assets in 1979.
Restricting Federal Contracts

Another potential measure involves prohibiting US companies that maintain operations in China from competing for federal contracts. This approach could be sector-specific, targeting industries where a blanket order might have broader unintended consequences. For example, a major defense contractor like Boeing, which has significant manufacturing operations in China, including a 737 completion plant opened in December 2018, could be impacted by such a policy. This strategy leverages the government's purchasing power to influence corporate behavior.
Invoking the Trading with the Enemy Act

A more drastic, though considered unlikely, option would be to invoke the 1917 Trading with the Enemy Act. This legislation grants the President the authority to regulate and penalize trade with an enemy country. However, invoking this act would represent a significant escalation of tensions and is viewed as improbable given the existing diplomatic relationship and the potential for severe diplomatic repercussions. The IEEPA is seen as a more flexible tool that allows for similar actions with a potentially lower diplomatic cost.

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What legal tools can Trump use to force US firms out of China?

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