The IEEPA Law: What Is It?

The International Emergency Economic Powers Act (IEEPA), codified at 50 U.S.C. §§ 1701–1707, is a federal law enacted by Congress in 1977 that grants the President broad authority to regulate international commerce and financial transactions during a declared national emergency.

Origins and Purpose

IEEPA was enacted to clarify and constrain the expansive emergency economic powers that presidents had previously exercised under the Trading with the Enemy Act of 1917 (TWEA). Before IEEPA, presidents could declare economic emergencies without any defined scope, duration, or meaningful congressional oversight. IEEPA imposed procedural limits: any emergency declared under the Act must be renewed annually and is subject to oversight under the National Emergencies Act.

What IEEPA Authorizes

Under IEEPA, once the President declares an unusual and extraordinary threat to national security, foreign policy, or the economy that originates outside the United States, the President may:

• Block transactions and freeze assets of foreign persons or entities

• Regulate or prohibit importation or exportation

• Impose conditions on financial transactions involving foreign countries or nationals

• Void or nullify contracts involving foreign interests

IEEPA does not authorize regulation of purely domestic transactions, personal communications that do not involve a transfer of value, or humanitarian donations.

The Tariff Question

For nearly five decades after its enactment, IEEPA was used primarily to impose sanctions on foreign nations and individuals — not to impose tariffs. The first use of IEEPA to impose broad import tariffs came in 2025, when President Trump invoked the statute to impose sweeping "reciprocal" tariffs on virtually all U.S. trading partners.

Whether IEEPA authorizes tariffs was hotly contested. Critics argued that the statute's reference to regulating "importation" was not a clear grant of tariff authority, and that such an interpretation would raise serious constitutional concerns under the major questions doctrine — which requires Congress to speak clearly when delegating authority over decisions of vast economic significance.

The Supreme Court's Ruling

On February 20, 2026, the U.S. Supreme Court resolved this debate in Learning Resources, Inc. v. Trump, holding 6–3 that IEEPA does not authorize the President to impose tariffs. The Court found that IEEPA's language authorizing the President to "regulate . . . importation" does not constitute the clear statutory authorization required before a president can unilaterally impose unlimited tariffs on all trading partners.