Now the Trump administration is floating the imposition of a 20% tax on Mexican imports to pay for the wall. Obviously, this would violate NAFTA, but the U.S. President likely has the unilateral authority to impose such a tax.
The International Emergency Economic Powers Act of 1977 gives the President the power to “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.”
Presumably, the tax would be considered regulation of importation under the above paragraph.
Now, the Economic Powers Act also compels the President to “consult with the Congress,” but it is not clear that imposes a significant limit on his tax powers.
Alternatively, President Trump could use the Trading with the Enemy Act of 1917, which Richard Nixon invoked to impose a 10% import surcharge in 1971. But the Trump tax could be appealed to the U.S. Court of International Trade USCIT). It turns out that there is some case law on this. In United States v Yoshida International, USCIT’s predecessor ruled that the courts would not challenge the validity of a Presidential declaration of a state of war or national emergency but would check to see that the remedy imposed was appropriate to the nature of the emergency. I suppose that the emergency would be the existence of illegal immigration from Mexico and the remedy would be the wall. (Judging from U.S. v Yoshida, I do not think that the tax would stand under Trading with the Enemy but it might under the Economic Powers Act. Either way, it could be in place for years.)
The courts would have to review if this violates the NAFTA Implementation Act of 1994, but my guess is that the Implementation Act would not be held to supercede Presidential powers under the Trading with the Enemy Act or the Economic Powers Act.
And even if it did, the Trump administration could announce that it was withdrawing from NAFTA. The logic would be that the NAFTA agreement allows withdrawal and the NAFTA Implementation Act gives the president the power to proclaim tariffs as laid out in the NAFTA. Poof, a rationale for unilateral Presidential powers.
Of course, if you abrogated NAFTA, you could easily enough pay for the wall with the imposition of pre-NAFTA levies. It looks like the Trump administration is looking for more than that, however: they seem to want to damage U.S.-Mexico commerce as much as possible.
Or at least drive down the value of the peso even further.
The tax would also have to exempt autoparts. More on this later ...