Trump plans to use obscure law to make US companies cut ties with China

Donald Trump has threatened to use an obscure federal law to order US businesses to cut ties with China as the trade war between the two countries escalates.

He originally made the “order” for US companies to sever links with China in a tweet – but it appeared he had no powers to enforce it.

However, it has since emerged he could use the emergency authority granted by a powerful federal law to carry out his tweeted request.

China’s announcement on Friday that it was raising tariffs on $ 75bn (£61bn) of US imports infuriated the president and White House aides scrambled to respond.

Mr Trump tweeted that American companies “are hereby ordered to immediately start looking for an alternative to China”.

He later clarified that he was threatening to make use of the International Emergency Economic Powers Act in the trade war.

The 1977 act is normally used to target rogue regimes, terrorists and drug traffickers.

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The president tweeted: “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. Case closed!”

The act gives presidents wide-ranging powers to regulate international commerce during times of declared national emergencies.

Mr Trump threatened to use the same powers earlier this year to place tariffs on imports from Mexico in a bid to force it to do more to stop illegal crossings at the border.

The president’s retaliatory action against the Chinese, which involved raising tariffs further on Chinese exports to the US, had sparked widespread outrage from the business community.

The Consumer Technology Association called the escalating tariffs “the worst economic mistake since the Smoot-Hawley Tariff Act of 1930 – a decision that catapulted our country into the Great Depression”.

Trade association CompTIA said forcing companies to shift operations out of China would take most of them months.

“Any forced immediate action would result in chaos,” CEO Todd Thibodeaux said.

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