The Atlanta Journal-Constitution
Trump ‘hereby’ orders U.S. business out of China. Can he do that?
President Donald Trump’s demanding U.S. companies move out of China — delivered in a series of tweets Friday — left industries scrambling to understand how seriously to take the order.
Businesses from retail to electronics to home goods, many already under pressure from a monthslong U.S.-China trade war, were contacting their industry associations for guidance.
“I’m trying to keep my cool and not get worried and upset, but it’s becoming hard,” said Margaret Raible, founder of Lite Gear Bags, a luggage maker based in Vallejo, California.
She has a meeting this week with an industry colleague to discuss moving more of her manufacturing from China to India or South Africa, she said. “I don’t know how much faster I can move or how much more urgency I can have,” she said.
Late Friday night, as the president arrived in France for the G7, he suggested on Twitter he would be looking to the International Emergency Economic Powers Act, signed into law in 1977, to follow up on his demand.
Trump does not have the authority to “duly order” companies to leave China, according to Jennifer Hillman, a Georgetown University law professor and trade expert at the Council on Foreign Relations.
But under the law he cited, Trump can prevent future transfers of funds to China, she said. First, he would have to make “a lawful declaration that a national emergency exists,” she said.
Congress could terminate the declaration if it wishes, she said.
“Moreover, even if all this happened, it would not provide authority over all of the U.S. investments that have already been made in China,” Hillman said.
Other trade experts said Trump does have powerful tools at his disposal to encourage companies to leave.
They include continuing to hike tariffs on imports from China. The White House could also try to punish companies by cutting them out of federal procurement deals, economists said.
“The tweet isn’t entirely cheap talk,” said Derek Scissors, a China expert at the American Enterprise Institute, a think tank partly funded by industry.
“We don’t need China and, frankly, would be far better off without them,” Trump wrote. “Our great companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
The message made public what Trump has been telling companies in private for more than two years, said William Reinsch, a trade expert at the Center for Strategic and International Studies.
“The reality is many companies have been thinking about leaving, anyway,” Reinsch said. “Labor costs are going up in China, the regime is repressive, and American companies continue to suffer discrimination,” he added.