What do Trump's executive orders say on tariffs and how would they work?

US President Donald Trump has, through three executive orders, almost immediately introduced volatility into the global economy and his own goal of lowering inflation. To stem illegal immigration and the illicit trade of fentanyl, he has imposed tariffs on Canada and Mexico, leading both countries to retaliate with tariffs on US imports.

Trump also imposed a 10% tariff on imports from China, with the stated goal of stopping fentanyl production. But at a deeper level, Trump has abruptly imposed a tax increase on the US economy that, if it persists, could total more than $1 trillion (A$1.61 trillion) over 10 years.

He took these actions without congressional approval, and he himself acknowledges that they could bring "some pain," including higher inflation, unemployment, and worse economic growth. Here is an explanation of what Trump's executive orders do and how they work.

The International Emergency Economic Powers Act, a 1977 law, helped Trump declare an economic emergency and impose tariffs in the executive orders. There are currently more than thirty states of emergency in effect, including measures taken in response to the 1979 Iranian hostage crisis, human rights abuses in Venezuela, North Korea's nuclear weapons development, and multiple actions taken by China and Russia. The law allows the president to freeze and block transactions in response to "unusual and extraordinary" threats from outside the US.

The tariffs on Canada, Mexico, and China will take effect starting Tuesday, US time. Imports from Canada will be subject to an additional 25% tariff, with a lower 10% tariff on oil, gas, electricity, and other energy products. The lower rate on energy products is to prevent US consumers and businesses from paying higher prices for gasoline and utilities. Imports from Mexico will face an additional 25% tax. Imports from China will face an additional 10% tariff. Although Trump claims these taxes are paid by foreigners, in reality, the tariffs will be paid by the individuals and companies that import the goods, meaning this will be a domestic tax increase.

Trump’s orders state that the tariffs are a consequence of illegal immigration and drug trafficking. Not everyone agrees with his rationale, as US government reports show that unauthorized border crossings from Mexico have decreased in the past year, and that relatively small amounts of fentanyl are seized at the northern border. But Trump’s order on Mexico claims that drug cartels and the country’s government have an “unacceptable alliance” that “endangers the national security of the United States, and we must eradicate the influence of these dangerous groups.”

His order on Canada claims that Mexican drug cartels are operating in that country and asserts that, although the amount of fentanyl intercepted is small, it is enough to kill “9.5 million Americans.” His order on China claims that the country’s government provides a “safe harbor” for criminal organizations to “launder proceeds from the production, trafficking, and sale of illicit synthetic opioids.” These are the stated legal justifications, but Trump has generally expressed a deep fondness for tariffs, claiming they make the US richer, even though they are a tax increase that can be passed on to consumers and businesses through higher prices.

Can the tariffs be increased? Yes. The orders are very clear that the US president can respond to retaliatory actions – and Canada and Mexico are already poised to implement counter-tariffs on US products. If they take action, Trump “may increase or expand the scope of tariffs imposed by this order.” The key point is that the tariffs won't automatically increase; this remains the US president's choice.

What does the "de minimis" clause mean? This is an important clause in the orders. When people import goods worth less than $800 (A$1291), such as a dress purchased online from a European retailer, they do not have to pay tariffs on the purchase. This is legally known as "de minimis" treatment, meaning that the cost of the imported goods is too low to justify imposing a tariff. This exemption will no longer apply to products imported from Canada, Mexico, and China.

Can Congress block the tariffs? That would require a new law that Trump would have to sign, which, based on his statements, seems unlikely. Nonetheless, Congress will have some oversight responsibilities, as the orders require the Department of Homeland Security, in consultation with other agencies, to “submit regular and final reports to Congress on the national emergency.”

How can the tariffs be removed? The government has not set any benchmarks that other countries need to meet, although one senior official suggested that a decrease in fentanyl-related deaths could be an option. The orders indicate that the final decision will be at Trump's sole discretion. It orders Homeland Security Secretary Kristi Noem to consult with her counterparts at the State and Justice Departments, as well as White House officials. The reference here is to the position of the Department of Homeland Security, not specifically to Noem herself. But she could advise the US president on whether “appropriate measures” have been taken to address the emergency. It will then be up to the president to decide whether to remove the tariffs.