International Emergency Economic Powers Act

Based on Wikipedia: International Emergency Economic Powers Act

In August 2019, President Trump fired off a tweet declaring that he "hereby ordered" American companies to stop doing business with China. The announcement bewildered legal experts and business leaders alike. Could a president really command private corporations to abandon their supply chains with a social media post? Trump claimed he had the authority under something called the International Emergency Economic Powers Act. He was wrong about the specifics—he hadn't actually declared the emergency the law requires—but he wasn't entirely wrong about the breathtaking scope of presidential power that this obscure 1977 statute provides.

The International Emergency Economic Powers Act, known in Washington by its unwieldy acronym IEEPA (pronounced "eye-pa"), is one of the most potent weapons in the American president's arsenal. It lets the commander-in-chief freeze bank accounts, block financial transactions, and effectively cut off individuals, companies, or entire nations from the global economy—all with the stroke of a pen.

And presidents have used it. A lot.

The Problem IEEPA Was Meant to Solve

To understand why Congress created this law, you need to go back to World War One. In 1917, as American troops shipped out to fight in the trenches of France, Congress passed the Trading with the Enemy Act. The law gave the president sweeping powers to regulate commerce with hostile nations during wartime. Reasonable enough during an actual war.

But here's where things got strange. Presidents discovered they could declare "national emergencies" under this law even when no war existed—and those emergencies could last indefinitely. Franklin Roosevelt invoked the Trading with the Enemy Act in 1933 to address the banking crisis, freezing gold transactions to stop bank runs. That emergency declaration? It was still technically in effect four decades later.

By 1973, when a Senate committee investigated the matter, they found four separate national emergencies humming along in the background of American life, largely forgotten by the public: Roosevelt's 1933 banking emergency, a 1950 emergency related to the Korean War, a 1970 emergency Nixon declared during a postal workers' strike, and a 1971 emergency addressing economic troubles. None had ever been formally terminated. The president's emergency powers had become a kind of permanent background radiation in American governance.

Congress decided to clean house. In 1976, they passed the National Emergencies Act, which terminated all those lingering emergencies and required future ones to be renewed annually. Then came IEEPA in 1977, designed to restore presidential emergency economic powers but with guardrails. The new law required that any threat must originate "in whole or substantial part outside the United States." Presidents could no longer invoke emergency powers to deal with domestic issues like labor strikes. They also had to report to Congress every six months about what they were doing and why.

What the President Can Actually Do

When a president determines that an "unusual and extraordinary threat" to national security, foreign policy, or the economy exists—and that threat comes from abroad—IEEPA grants remarkable powers. The president can block any transactions in foreign exchange, freeze assets held by foreign nationals, and prevent transfers of credit or payments involving foreign interests.

Think of it as the financial equivalent of quarantine. The president can essentially wall off a person, organization, or country from the American financial system. Given that the U.S. dollar underpins much of global commerce and that most international transactions flow through American banks at some point, this power extends far beyond U.S. borders. Getting cut off from the American financial system is, for many entities, the economic equivalent of being sent to solitary confinement.

The law does carve out some protections. Presidents cannot use IEEPA to regulate pure communication—information flowing back and forth without any money changing hands remains protected. Humanitarian donations of food, clothing, and medicine are generally exempt, though presidents can override this if they specifically find it necessary. And crucially, the First Amendment protections for informational materials—books, films, art, broadcasts—cannot be touched.

This last protection would later prove important in unexpected ways.

From Iran to TikTok: A Brief History of IEEPA in Action

The first major test of IEEPA came almost immediately after it passed. In November 1979, Iranian students stormed the American embassy in Tehran and took 52 Americans hostage. President Jimmy Carter, who had signed IEEPA into law just two years earlier, invoked it to freeze approximately twelve billion dollars in Iranian government assets held in American banks. This wasn't just punishment—it was leverage for eventual negotiations.

The Iran crisis also produced one of IEEPA's more colorful footnotes. Marc Rich, a commodities trader who would later become one of America's most wanted fugitives, allegedly violated the act by trading Iranian oil during the hostage crisis. He fled to Switzerland and remained a fugitive for years, until President Bill Clinton controversially pardoned him in the final hours of his presidency.

Since then, presidents of both parties have wielded IEEPA with increasing frequency. George W. Bush invoked it after the September 11th attacks to freeze assets of terrorist organizations. The USA PATRIOT Act, passed in the frantic weeks after the attacks, turbocharged these powers by allowing assets to be frozen merely during the "pendency of an investigation"—meaning the government didn't need to prove wrongdoing before taking action, and targets had limited ability to challenge the freezes in court.

But no president used IEEPA quite like Donald Trump.

The Trump Era: Testing the Limits

During his four years in office, Trump sanctioned more than 3,700 entities under IEEPA authority and declared eleven national emergencies relying primarily on the law. He also pushed its boundaries in ways that alarmed legal scholars and delighted supporters who saw executive power as underutilized.

In May 2019, frustrated by illegal immigration at the southern border, Trump announced he would use IEEPA to impose tariffs on Mexican imports. This was novel. The law was designed for foreign threats, yes, but immigration policy? Trade disputes? Previous presidents had used IEEPA for traditional national security concerns—hostile governments, terrorist groups, weapons proliferators. Using it as a tariff tool seemed like a stretch.

Then came the social media wars.

In September 2020, citing national security concerns about Chinese government access to American user data, Trump signed executive orders targeting TikTok and WeChat. The orders would have banned the apps from American app stores and prohibited business transactions with their Chinese parent companies, ByteDance and Tencent. TikTok users and critics raised First Amendment alarms. Was this really about national security, they asked, or was it retaliation? Some pointed to a June 2020 campaign rally in Tulsa, Oklahoma, where TikTok users had allegedly inflated expected attendance by reserving tickets they never intended to use, contributing to an embarrassingly sparse crowd.

Federal courts blocked both orders. The judges found that the bans likely violated IEEPA's own protections for informational materials—the Berman Amendment, named after Representative Howard Berman of California, who had championed free information flow across borders. The law that giveth such broad presidential power also had built-in limits, and courts were willing to enforce them.

Another Trump-era use of IEEPA proved even more controversial. In September 2020, the administration sanctioned two officials of the International Criminal Court, the Hague-based tribunal that prosecutes war crimes and crimes against humanity. The ICC had been investigating allegations that American military personnel committed war crimes in Afghanistan. The administration's response was to sanction the court's chief prosecutor, Fatou Bensouda of Gambia, and another senior official, effectively barring them from the American financial system.

Critics called it an attempt to intimidate international civil servants from doing their jobs. A federal court agreed that something was amiss and issued a preliminary injunction blocking the sanctions. The Biden administration lifted them entirely in April 2021.

The Berman Amendment: Protecting the Flow of Ideas

One of the more fascinating subplots in IEEPA's history involves the ongoing tension between emergency economic powers and free speech. When Congress passed IEEPA in 1977, it included basic protections for informational materials. But the Treasury Department's Office of Foreign Assets Control, known as OFAC (pronounced "oh-fack"), which actually implements these sanctions day-to-day, interpreted the exemption narrowly. OFAC claimed it could still prohibit transactions involving any informational materials "not fully created and in existence at the date of the transaction."

In plain English: you could import an already-published book from a sanctioned country, but you couldn't pay a publisher there to create a new one. This struck many as absurd. Could an American academic collaborate with a Cuban scholar on a research paper? Could a documentary filmmaker pay an editor in a sanctioned nation?

Representative Berman thought this was ridiculous and pushed back. In 1988, Congress passed what became known as the Berman Amendment, clarifying that various forms of communication—print, audio, video, artwork—were protected. When OFAC continued its narrow interpretations, Congress passed an even stronger version in 1994, the Free Trade in Ideas Act, which extended protections to newer media like television broadcasts and explicitly stated that the list of protected materials was illustrative, not exhaustive. Future technologies would be covered too.

This is why federal courts could block Trump's TikTok ban. Whatever legitimate national security concerns existed, the courts found that banning an entire communications platform likely crossed the line Congress had drawn around information sharing.

The Machinery of Sanctions

In practice, IEEPA powers are wielded not by the president personally but by OFAC, a small but mighty office within the Treasury Department. OFAC maintains various sanctions lists—the most famous being the Specially Designated Nationals list, or SDN list, which reads like a who's who of the world's bad actors: drug traffickers, terrorists, weapons proliferators, human rights abusers, and officials of hostile governments.

Getting placed on the SDN list is devastating. American citizens and companies are prohibited from doing any business with you. Your assets in the United States are frozen. Because of America's central role in global finance, banks and businesses worldwide often refuse to deal with sanctioned parties even when not legally required to do so—they simply can't risk running afoul of American regulators.

Major banks have paid enormous penalties for sanctions violations. In 2009, Credit Suisse forfeited 536 million dollars after admitting it helped residents of sanctioned countries wire money in violation of IEEPA. In 2020, a UAE-based firm paid a smaller but still substantial fine for violating North Korea sanctions.

The Emergency That Never Ends

Remember those pre-IEEPA emergencies that Congress terminated in 1976 because they had been running for decades? The system Congress designed to prevent that from happening again hasn't entirely worked.

As of 2025, dozens of IEEPA emergencies remain active, some dating back forty years. The Nicaragua emergency declared in 1985 ran until 1990. South Africa was under emergency sanctions from 1985 to 1991 for maintaining apartheid. Some emergencies have been terminated as conditions changed—the Afghanistan emergency declared in 1999 for harboring al-Qaeda ended in 2002 after the Taliban fell. Others have proven remarkably durable.

The Syria emergency, declared in 2004 against the government of Bashar al-Assad, persisted through that regime's brutal civil war and only ended in 2025 after Assad's fall. Zimbabwe faced American emergency sanctions from 2003 to 2024—over two decades—targeting the government of ZANU-PF.

Some emergencies have been notably brief or narrowly targeted. The International Criminal Court emergency lasted only from 2020 to 2021, terminated when the Biden administration reversed course. An emergency targeting violent West Bank settlers ran from 2024 to 2025.

The annual renewal requirement hasn't proven much of a check. Presidents routinely send letters to Congress extending their emergency declarations, and Congress rarely objects. What was designed as a limited, overseeable power has become a persistent feature of American foreign policy.

The Bigger Picture

IEEPA sits at an interesting intersection of American governance. It represents Congress trying to rein in executive power while still giving the president flexibility to respond to genuine emergencies. It shows how laws designed for one purpose—economic warfare against hostile foreign governments—can be stretched toward others: immigration policy, trade disputes, social media regulation, international justice.

The law also illustrates the challenge of protecting civil liberties during emergencies. The Berman Amendment exists because Congress recognized that economic sanctions shouldn't mean intellectual isolation. Americans have a right to read books, watch films, and communicate with people in countries their government opposes. Drawing that line has proven complicated, especially as technology evolves.

Perhaps most importantly, IEEPA demonstrates how much of American foreign policy operates through financial power rather than military force. The ability to cut someone off from the global financial system—what some call "dollar weaponization"—has become one of America's most frequently used tools of statecraft. It's quieter than bombs, but it can be just as devastating to its targets.

The next time you hear about sanctions against a foreign government or see headlines about freezing assets of oligarchs, IEEPA is likely the legal authority making it possible. It's one of those laws that most Americans have never heard of but that shapes the world in profound ways—a reminder that some of the most consequential powers in a democracy are often the ones that operate furthest from public view.