White House insists Trump has authority to block American companies from doing business in China

Kadia Tubman
Reporter

White House economic adviser Larry Kudlow asserted President Trump’s threat to block trade between private Americans businesses and China, saying he has “emergency economic power authority” to do so.

“Do you believe that the president does have the authority to block private businesses from investing in China?” CBS News' Margaret Brennan asked Kudlow on “Face the Nation” Sunday.

“Ultimately, he does have authority,” responded Kudlow. “It’s an emergency economic power authority,” he said, adding that Trump “is not intending to” block trade with China at this time.

Amid an escalating trade war, Trump in a series of angry tweets Friday “ordered” American companies “to immediately start looking for an alternative to China, including bringing our companies HOME and making your products in the USA.”

President Trump at the G-7 summit in Biarritz, France, Aug. 25, 2019. (Photo: Nicholas Kamm/AFP/Getty Images)

Trump’s directive came before he announced a plan to put an additional tax on $300 billion worth of Chinese goods beginning Sept. 1. Trump was responding to China’s plan to increase tariffs on $75 billion worth of American goods.

“We don’t need China and, frankly, would be far better off without them,” he said.

In June, Apple said it had asked its suppliers to look into moving 15 to 30 percent of their production out of China. But that wouldn’t necessarily create jobs in the U.S.; instead, production would more likely shift to other countries in Asia.

Following up on his demand for businesses to cut ties with China, Trump cited the International Emergency Economic Powers Act of 1977, which gives the president broad powers “to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.”

The law, which was first used by President Jimmy Carter during the 1979 Iran hostage crisis to sanction Iran and freeze its assets, has been used in 54 national emergencies, 29 of which are ongoing, according to CNN. Earlier this year, Trump threatened to use the law to place tariffs on Mexican imports in an effort to stem illegal border crossings.

“In theory, that law exists,” Kudlow said, referring to Mexico. “He’s asking American companies to take a look, take a fresh look at, frankly, moving out of China, going someplace else. Preferably coming home to America.”

“That takes years,” Brennan interjected.

“It will take years, that is correct,” Kudlow said. “And that’s why there’s no immediate action here.”

‘I’ve heard him say this time and time again the couple of years I’ve been working here. He said it to individual business, he said it to the big business groups. He’s asking them to come home, come back to America. We’re giving you low taxes and low regulations and an entrepreneurial environment.”

“In a sense, this is nothing new,” Kudlow added. “Maybe the way it was phrased was a little tougher than usual.”

Trump on Sunday said he has second thoughts about the escalating tensions between the U.S. and China, but the White House later argued that the president had been “greatly misinterpreted” and that, to the contrary, “he regrets not raising the tariffs higher.”

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