This is no way to run a trade war

Mr. Trump is right about the need to overhaul the global trading order. The U.S. must account for China’s position as a strategic competitor hostile to American interests. He is also right that a more balanced international trading system would foster a stronger American economy. But last week’s trade war was neither lawful nor designed to serve America’s strategic interests.

In imposing the tariffs, Mr. Trump misused the 1977 International Emergency Economic Powers Act. Congress passed IEEPA to give presidents tools to respond quickly to emergencies like wars or terrorist attacks, with actions such as freezing the assets of enemies or preventing foreign militaries from buying critical inputs. IEEPA has never been used for tariffs, and courts should rule that it can’t be. Last week’s chaos illustrates why. Presidents shouldn’t be able to upend the economy at the stroke of a pen. Trade statutes, on the other hand, require detailed studies into why a country or product should be subject to tariffs, and the proposed tariffs must be subject to public comment.

Using lawful trade statutes would require the Trump administration to follow the basic rules of trade wars: Express clear objectives and a strategy for achieving them. Mr. Trump’s executive orders attributed the new tariffs to the role of Canada and Mexico in America’s fentanyl crisis, which he designated a national emergency. But when he defends his tariffs on Canada, Mr. Trump cites America’s trade deficit and claims revenue from the tariffs will pay for tax cuts.

U.S. trade laws require the president to identify and investigate specific trade practices that harm the U.S. and then propose remedies, such as tariffs or negotiations. A president may impose tariffs on specific goods if fact-finding determines that imports threaten U.S. national security. Mr. Trump’s reasons for imposing tariffs on Canada don’t appear to satisfy these standards. If the president has goals not covered by existing statutes, such as raising revenue or mitigating trade deficits, he should ask Congress to give him the authority to pursue such goals through tariffs.

Mr. Trump also needs a negotiating strategy that isn’t predicated on constant chaos. Faced with Mr. Trump’s tariff threats, Canadian, Mexican and European officials have indicated that they are open to collective action against China, the world’s biggest exporter and a major source of U.S. trade deficits. This would help U.S. industries: American car companies, metal producers and other manufacturers struggle to compete in markets flooded with cheap Chinese goods.

Europe may also be willing to address American concerns about European tech regulations that threaten free speech and burden U.S. companies with fines—especially given Europe’s dawning recognition that it needs a more dynamic tech sector. European countries’ new defense and fiscal stimulus packages—one welcome result of Mr. Trump’s pressure to become more self-reliant—could create a stronger market for U.S. goods.

But foreign governments are less likely to cooperate with the U.S. if it foments chaos and issues conflicting trade demands. During Mr. Trump’s first term he was unable to resolve a long-standing trade dispute between the U.S. and the European Union over aircraft subsidies, which involved tariffs and countertariffs between the two sides. They agreed to a five-year truce in June 2021 under President Biden. Mr. Trump’s new trade war may create a similar dynamic, but on a vastly larger scale. This isn’t a recipe for American success.

Economists estimate that a global trade war could cost the U.S. 1% or more of gross domestic product, with price increases across a range of consumer products. Companies like Target and Best Buy warn they may have to raise prices amid Mr. Trump’s tariffs.

And that’s before foreigners make things more painful. Mr. Trump looks at America’s appetite for goods and sees leverage: The U.S. can tariff foreigners more than they can tariff the U.S. But what if America’s trading partners turn its import dependencies to their advantage? Europe holds a dominant position in creating advanced semiconductor manufacturing tools. It could cut off its supply to the U.S., destroying America’s hopes of developing leading-edge chips. Beijing wins in that world.

Mr. Trump has a chance to correct course in April, when his administration releases reports on U.S. trade policy that he commissioned the day he took office. If these reports set up a disciplined and lawful trade process and serve as the launching pad for skilled negotiations, Mr. Trump and his team have a chance to establish a new global trading order that advances America’s interests, much like American policymakers in the late 1940s set up an economic order that promoted U.S. economic growth and helped win the Cold War.

If the next few months resemble the past week, however, the Trump administration risks being remembered alongside Sen. Reed Smoot (R., Utah) and Rep. Willis C. Hawley (R., Ore.), whose 1930 Smoot-Hawley Act imposed massive tariffs on more than 20,000 imported products, provoked retaliatory tariffs, exacerbated the Great Depression and gave “tariff" a bad name.

Mr. Harrell is a nonresident fellow at the Carnegie Endowment for International Peace, an attorney and host of the “Security Economics" podcast. He served at the White House as senior director for international economics, 2021-22.