Apparently, Donald Trump has actually discussed, with his aides and advisors, the legality around making good on the threat posed during his Friday Twitter broadside.
“Our great American 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 president shouted into the digital void, hours before raising the tariff rate on Chinese goods.
Generally speaking, most observers wrote that off as Trump venting, although what it conveyed about his general level of agitation was unnerving in the extreme, hence the violent reaction across markets.
Read more: ‘The Fed Did NOTHING!’ Trump Loses Mind On Twitter After Powell Speech, China Tariffs
Well, believe it or not, Trump officials are now defending the notion that Trump could, if he chose, order US companies to cease operations overseas.
Specifically, Steve Mnuchin and (of course) Larry Kudlow said the president could invoke the International Emergency Economic Powers Act, something Trump himself referenced over the weekend. “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”, the president tweeted. “Case closed!”
“There’s no emergency powers being invoked right now”, Kudlow said, before reminding the world that “ultimately, we do have such authority, but it is not going to be exercised presently”. Here’s a clip from Face The Nation:
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“Well look, ultimately he does have the authority”, Kudlow said. “The Emergency Economic Power authority… it was nearly invoked regarding the Mexican border crisis”, Larry continued, adding that “in theory that law exists… he’s asking American companies to take a look – take a fresh look – at, frankly, moving out of China”.
“That would take years”, an incredulous Margaret Brennan said. “It will take years”, Kudlow conceded.
For his part, Mnuchin told Fox that “what [Trump] was saying is he’s ordering companies to start looking, because he wants to make sure to the extent we are in an extended trade war that companies don’t have these issues and move out of China”.
Mnuchin’s answer was better than Kudlow’s to the extent the more matter-of-fact, monotone cadence served to mute the inherently alarming nature of the subject, but it shouldn’t be lost on anyone how momentous a decision this would be. Presumably, Congress would step in to stop the White House from crossing the Rubicon, but suffice to say that if Trump were to try and push the issue, it would likely translate into grievous losses on Wall Street as analysts and investors attempted to come to terms with the enormity of such a move.
Corporate America would doubtlessly revolt. “I wish I had a factory in China so I could hereby ignore [Trump]”, AQR’s Cliff Asness said Friday. “What can’t you order if you use the word ’emergency’ to mean ‘something I kinda think we should do’?”, Cliff went on to wonder.
Finally, just to underscore the extent to which Mnuchin and Kudlow are now on the hook for justifying what, if everyone is being honest, is a totally incoherent and legally dubious trade strategy, here’s the duo trying to explain the president’s “second thoughts” comments again.
11 thoughts on “Mnuchin, Kudlow Tell Cable News Trump Has Authority To Order American Companies To Leave China”
Why are we even burning calories on this nonsense? We are a desperately insecure country notwithstanding how great we are. And our Fair Orange Leader can’t even stop making his crap ties in China let alone move factories across continents. How embarrassing.
Suggest Yes Order No. We continue down the path to lawlessness. Great time to add to my SQQQ this market is so overvalued I’ve been wrong for a while looking for another elevator move down this week lower hi’s lower low’s will spell the death of FANGMAN and the Naz 100
The S&P futures opened only down 1.4% Interesting week, looking to the Dallas Fed to see if the oil patch is imploding. Then the is the GDP revision with corporate profits, that’s a big one.
So the government can now tell companies where and how to spend their money. I guess it is time to tell Xi, that his ideology won.
Yup, trumpolini has asked his national security advisors if he could nuke hurricanes to stop them from hitting the US.
At this point China trade seems the least of the problems.
He could fire the nukes from his space rangers.
H-Man, if only Johnny Carson was alive would this make sense.
Finally his Fascist regime can teach those Americans who do not know what Fascism is, will lead by example.
Where are all those purist free marketeers in the GOP who screamed about Solyndra now? Speak up, please!!
Re: “we do have such authority, but it is not going to be exercised presently””
However, there is the matter of legality, challenges to constitutionality, litigation, humiliation, uncertainty and a loud alarm being sounded for sanity.
I’m thinking some one has spiked his Twinkies. Or maybe the Ho Ho’s or Ding Dongs.