The International Emergency Economic Powers Act (IEEPA) of 1977 authorizes the U.S. President to declare a national emergency and regulate commerce in response to any “unusual and extraordinary” foreign threat to the U.S. national security, foreign policy, or economy. It is a key tool for enacting sanctions, embargoes, and blocking foreign assets.
Key Aspects of IEEPA
- Purpose: To provide the President with authority to handle specific, foreign-sourced economic or security crises.
- Trigger: The President must declare a national emergency under the National Emergencies Act (NEA).
- Actions Allowed: The President can block, regulate, or freeze transactions involving foreign entities or assets.
- Usage: Frequently used for targeted sanctions against nations, terrorist groups, or drug traffickers.
- Controversy: Recent attempts to use IEEPA to impose tariffs were struck down by the Supreme Court in 2026, which ruled the Act authorizes regulating transactions, not broad taxation or tariffs.
The International Emergency Economic Powers Act (IEEPA) is a key U.S. federal law that grants the President significant authority to regulate international economic transactions during declared national emergencies involving foreign threats. Enacted as Title II of Public Law 95–223 and signed into law by President Jimmy Carter on December 28, 1977, it is codified at 50 U.S.C. §§ 1701–1707.
Legal Context
IEEPA was enacted in 1977 to replace or modify aspects of the Trading with the Enemy Act (TWEA). It works in tandem with the National Emergencies Act (NEA), which provides the framework for declaring emergencies and requires Congress to review them.
Purpose and Origins
IEEPA was created to reform and limit presidential emergency powers that previously existed under the Trading with the Enemy Act (TWEA) of 1917. TWEA allowed broad economic controls even during peacetime emergencies, but Congress sought to restrict such authority after abuses during the Nixon era (e.g., the 1971 gold window closure and import surcharge). IEEPA narrowed the scope to international threats originating outside the U.S., required a formal national emergency declaration, and added oversight mechanisms like congressional reporting and the ability for Congress to terminate emergencies.
It sits under the broader National Emergencies Act (NEA) framework, which governs how emergencies are declared and managed.
Key Provisions: What the President Can Do
Under 50 U.S.C. § 1702, after declaring a national emergency for an “unusual and extraordinary threat” to U.S. national security, foreign policy, or economy (with the threat originating “in whole or substantial part outside the United States”), the President may:
- Investigate, regulate, or prohibit:Any transactions in foreign exchange.
- Transfers of credit or payments involving foreign interests (through U.S. banking institutions or otherwise).
- The importing or exporting of currency or securities.
- 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 national has any interest.
- Block (freeze) assets and prohibit most transactions with designated foreign entities, individuals, or governments.
- In cases of actual armed attack on the U.S., confiscate property connected to those aiding the attack.
These powers are typically implemented through executive orders and Treasury Department regulations (via the Office of Foreign Assets Control, or OFAC), creating sanctions programs like blocking assets of specific countries (e.g., Iran, Russia, North Korea), individuals, or entities.
The authority is explicitly limited: powers “may only be exercised to deal with [the declared] unusual and extraordinary threat” and “may not be exercised for any other purpose.” Each new threat generally requires its own emergency declaration.
Limitations and Oversight
- Declaration requirement — The President must formally declare a national emergency under the NEA and specify the threat.
- Reporting — The President must consult with Congress before declaring (where possible) and report every six months on the emergency’s status, actions taken, and reasons for continuation.
- Congressional termination — Congress can end the emergency via a joint resolution (though subject to presidential veto, requiring a two-thirds override).
- No domestic application for purely internal threats — Unlike TWEA, IEEPA is limited to foreign-sourced threats.
- Judicial review — Courts can review whether actions exceed statutory authority, though deference is often given to executive national security judgments (e.g., Dames & Moore v. Regan, 1981, upheld broad use during the Iran hostage crisis).
Over time, IEEPA has become the primary legal basis for most modern U.S. economic sanctions regimes, supporting dozens of ongoing national emergencies (many renewed annually for decades).
Recent Context: The 2026 Supreme Court Ruling
In a landmark 6-3 decision on February 20, 2026 (Learning Resources, Inc. v. Trump and consolidated cases), the U.S. Supreme Court ruled that IEEPA does not authorize the President to impose tariffs (duties on imports). Chief Justice Roberts’ majority opinion (joined by Justices across the spectrum) held:
- Tariffs are a form of taxation (specifically “Duties, Imposts and Excises”), a power explicitly vested in Congress under Article I, Section 8 of the Constitution.
- IEEPA’s language allowing the President to “regulate … importation” does not extend to imposing tariffs of unlimited scope, rate, or duration on imports from any country.
- Such broad tariff authority would require clear congressional delegation, which IEEPA lacks—especially given the “major questions doctrine” for actions of vast economic significance.
- The ruling invalidated Trump’s “Liberation Day” global/reciprocal tariffs and fentanyl/trafficking-related duties imposed under IEEPA starting in 2025, which had generated billions in revenue.
Dissenters (Justices Thomas, Alito, and Kavanaugh) argued the measures addressed legitimate foreign policy and security threats, but the majority emphasized constitutional limits on executive overreach.
This decision reinforces that while IEEPA provides sweeping sanctions tools (asset freezes, transaction bans), it is not a blank check for unilateral trade taxes like tariffs—those remain Congress’s domain unless explicitly delegated elsewhere (e.g., via trade acts like Section 232 or 301).
IEEPA remains a cornerstone of U.S. foreign policy toolkit for sanctions, but the 2026 ruling clarified its boundaries in the trade arena.
