Trump considers declaring national economic emergency to impose tariffs

Donald Trump is mulling over the idea to declare a national economic emergency to impose widespread tariffs, CNN reports, as the president-elect escalates threats to seize the Panama Canal, acquire Greenland and force Canada into becoming a US state.

The emergency powers move would allow Trump to implement broad tariff measures against both allies and adversaries through the International Economic Emergency Powers Act, according to four sources familiar with the discussions.

The emergency powers would give Trump significant latitude in constructing a new tariff programme without having to demonstrate traditional national security justifications, the sources told CNN. “Nothing is off the table,” one source familiar with the matter told the network, confirming that robust discussions about declaring a national emergency have taken place.

The exploratory consideration comes amid mounting international backlash after Trump refused to rule out using military or economic coercion regarding Panama and Greenland during a rambling press conference at Mar-a-Lago on Tuesday.

Trump claimed the Panama Canal was “being operated by China” and demanded its return to US control. “The Panama Canal was built for our military,” Trump said. “Look, the Panama Canal is vital to our country.”

The president-elect also threatened Denmark with punitive tariffs over Greenland, warning he “would tariff Denmark at a very high level” if the country resisted his territorial ambitions. His comments coincided with his son Donald Trump Jr’s arrival in Nuuk, Greenland’s capital, where he reportedly distributed “Make Greenland Great Again” hats while claiming to be visiting as a tourist.

Allied leaders swiftly rejected Trump’s positions. Panama’s president, José Raúl Mulino, insisted “every square metre” of the canal would remain under Panamanian sovereignty. The Danish prime minister, Mette Frederiksen, reiterated that “Greenland is not for sale”, emphasising the territory’s future would be decided by its people.

Trump’s aggressive stance extended to Canada, with suggestions of using “economic force” to make it a US state. The Canadian prime minister, Justin Trudeau, dismissed the idea, saying there “isn’t a snowball’s chance in hell that Canada would become part of the United States”.

Some Trump advisers attempted to downplay the rhetoric, telling the Wall Street Journal the comments were negotiating tactics rather than literal policy positions. Alexander Gray, a former Trump White House national security council chief of staff, characterised the approach as part of a broader strategy to “defend the western hemisphere against great power competitors”.

US financial markets fell in morning trading but ended the day broadly flat.