Trump's next trade weapon

Trump is reaching for a more drastic trade war weapon, with new threats to shut foreign goods out of the U.S. altogether.

Why it matters: It would mark a significant evolution of the administration's trade agenda, with potentially bigger economic fallout than the tariffs that have defined it so far.

• Trump may also have firmer legal footing for some import bans than emergency tariffs. Federal trade laws explicitly give presidents the power to prohibit imports under certain conditions, even where courts have rejected their authority to impose tariffs.
• Businesses can absorb the cost of a tariff, pass it on to customers, or some combination of both. But losing access to a key part or product altogether can result in shortages, stalled production and a chaotic scramble to find new suppliers.

Driving the news: Trump threatened to ban Canadian aircraft manufacturer Bombardier from selling jets in the U.S., just hours before Canada's retaliatory tariffs on $20 billion worth of U.S. goods took effect this morning.

• "NO MORE SELLING BOMBARDIER IN THE UNITED STATES!" Trump wrote on Truth Social. "If they want our Market, they must build here, and stop treating America like a 'piggybank.'"
• The Bombardier threat came days after Trump responded to the strong jobs report with a social media post demanding that the Federal Reserve lower interest rates, tying the demand to a sweeping threat to cut off trade with nations that would in theory include countries like Canada, Japan and China.
• "LOWER THE RATE OR I'LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT," Trump wrote. Notably, he added: "IT'S BETTER THAN TARIFFS!"

Between the lines: Top Trump trade official Jamieson Greer has also floated outright bans, saying last month that it could be an option to hit back at Canada's retaliatory tariffs.

• "We've never done these bans; it's quite extreme. But maybe we need to," Greer said in an interview with the CBC late last month.
• Greer also said in July that Trump "for sure can" use emergency powers to restrict trade, after the president threatened to cut off trade with Spain.
• At the time, Greer pointed to the Supreme Court's ruling that blocked Trump's emergency tariffs, noting that law "clearly says you can prohibit trade."

The intrigue: The U.S. has banned imports before, though usually as part of sanctions against adversaries rather than as leverage in a trade dispute with a close economic partner like Canada.

The Supreme Court ruling that blocked Trump's emergency tariffs highlighted that a more potent option was available to him.

• The Court ruled that IEEPA doesn't authorize tariffs, but the law explicitly allows presidents to prohibit imports. Trump seized on that distinction the day the ruling came down. "I can embargo, but I can't charge one dollar," he told reporters.
• Justice Brett Kavanaugh called that an "odd donut hole" in oral arguments, noting that a president could shut down trade entirely, but couldn't impose even a 1% tariff.
• Section 338 of the Tariff Act of 1930, which Trump has already invoked against Canada, also allows the president to exclude a country's goods under certain conditions.

What to watch: Trump's Bombardier threat is already showing the political realities that can complicate such drastic trade moves.

• The company — and the firms that supply it — are deeply embedded in the U.S. economy, particularly in Kansas. It employs over 1,000 people in Wichita and buys from roughly 2,800 U.S. suppliers across 47 states.
• Kansas Republicans were quick to hint at the potential for economic fallout of an outright import ban.
• "I reached out to the Trump administration to make certain the President is aware of the significant contributions of Bombardier to Kansas," Sen. Jerry Moran posted on X.