Over the last month, attorneys practicing International Trade and Immigration Law have found themselves grappling with the volatile shifts in U.S. tariff policies. This article aims to shed light on the impacts of these evolving tariffs on the United States’ ability to attract foreign investment, the consequences for employment-based visas, and the broader ramifications for international businesses and investors seeking to establish a foothold in the U.S.
Read also: US Inflation and Tariff Policies Challenge Federal Reserve
Legal Authority & Tariffs Impacting Immigration
The President appears to be relying on the International Emergency Economic Powers Act (IEEPA) to announce (and then revoke) tariffs, particularly against Canada and Mexico. Although the IEEPA does not explicitly mention tariffs, duties, or import restrictions, it grants the President broad authority to regulate foreign economic transactions under the declaration of a national emergency.
The administration has linked recent tariff actions to the fentanyl crisis, asserting that Mexico and China have not done enough to curb the production and distribution of precursor chemicals. In turn, these tariffs disrupt supply chains, increase costs for businesses dependent on cross-border trade, and create uncertainty for investors considering U.S. market entry.
On March 14, 2025, Marco Rubio, the US Secretary of State issued a declaration in the Federal Register. In this declaration, Secretary Rubio asserted that “all efforts, conducted by any agency of the federal government, to control the status, entry, and exit of people, and the transfer of goods, services, data, technology, and other items across the borders of the United States, constitute a foreign affairs function of the United States under the Administrative Procedure Act, 5 U.S.C. 553, 554.”
This declaration has prompted justified concern from experts in the field due to the significant expansion of the powers of the State Department. US sanctions policy such as ITAR and EAR has traditionally been the purview of the US Department of Commerce, but this statements seems to usurp that authority.
By categorizing trade regulations (such as tariffs, export controls, and import restrictions) as part of the foreign affairs function, the statement implies that these policies can be implemented without following standard rulemaking procedures under the APA. This could allow the executive branch (e.g., the President, U.S. Trade Representative, or Commerce Department) to adjust tariffs, impose trade restrictions, or regulate imports/exports more quickly without going through the usual public comment and review process.
It may also limit legal challenges from businesses and trade partners, as courts often defer to executive authority in foreign affairs.
At a minimum, this statement implies that such efforts are inherently tied to national security and foreign policy considerations. By classifying these actions under the foreign affairs function exemption, the administration aims to shield its policies from judicial review and procedural requirements typically mandated under the APA. This has significant implications for immigration, as it could accelerate the implementation of restrictive policies without the standard notice-and-comment period, limiting avenues for legal challenges. Additionally, this approach raises concerns about transparency and due process, particularly for businesses and individuals reliant on consistent regulatory frameworks for trade and immigration planning.
Tariffs, Trade Wars, and the Future of the USMCA
The current trade war with Canada and Mexico follows a pattern set during the first Trump-led administration, which led to the renegotiation of NAFTA and the establishment of the U.S.-Mexico-Canada Agreement (USMCA). The USMCA, which took effect in 2020, strengthened labor and environmental standards, redefined rules of origin for the auto industry, and expanded U.S. farmers’ access to Canadian dairy markets. However, the agreement is set for mandatory review by July 2026.
The ongoing tariff disputes threaten the stability of the USMCA and create an unpredictable business environment. New tariff policies could result in retaliatory measures from Canada and Mexico, further straining cross-border economic activity and impacting immigration policies that facilitate labor mobility and investment-driven migration.
Impact on Immigration Visas Promoting Inbound Investments into the U.S.
TN Visa and USMCA
The TN visa category, originally created under NAFTA and preserved under the USMCA, allows professionals from Canada and Mexico to work temporarily in the U.S. in designated fields such as engineering, healthcare, and finance. While the USMCA maintained the TN visa framework, the unpredictable nature of trade negotiations raises concerns over potential restrictions in future amendments.
- Risk of TN Visa Revisions: If tariffs continue to escalate, Canada and Mexico may push for renegotiations affecting labor mobility. This could lead to stricter eligibility criteria, administrative hurdles, or outright limitations on TN visa renewals.
- Economic Implications: Many industries in the U.S., particularly healthcare and technology, rely on TN visa holders. Changes in visa availability could exacerbate labor shortages and disrupt business operations.
E-1 Treaty Trader & E-2 Treaty Investor Visas
The E-1 and E-2 visas, granted to individuals engaging in substantial trade or investment between the U.S. and their home countries, are particularly vulnerable to tariff instability.
- Trade-Based Visa Challenges: The E-1 visa requires “substantial trade” between the U.S. and the treaty country. If tariffs significantly increase the cost of imports and exports, businesses may struggle to maintain the required trade volume, leading to potential visa denials or non-renewals.
- Investment Uncertainty: The E-2 visa requires applicants to make a “substantial” investment in a U.S. enterprise. The unpredictable tariff environment discourages foreign direct investment (FDI), reducing the number of applicants willing to risk capital in the U.S.
EB-5 Immigrant Investor Program
The EB-5 visa program, which grants permanent residency to foreign nationals investing a minimum of $800,000 in U.S. businesses that create jobs, is another area impacted by trade wars.
- Decline in Investment Flow: Uncertain trade policies and potential retaliatory measures by other countries make the U.S. a less attractive destination for investors.
- Project Delays & Increased Costs: Tariffs on imported construction materials from China Canada and Europe directly impact EB-5-funded real estate and infrastructure projects, raising costs and reducing profitability.
H-1B & L-1 Visas: Impacts on Multinational Corporations
Multinational companies that rely on H-1B and L-1 visas for specialized foreign talent face additional challenges due to the trade war.
- Rising Costs for Employers: Companies dependent on global supply chains may experience increased operational costs due to tariffs, leading to reduced hiring of foreign workers.
- Relocation of Operations: Some businesses are considering shifting their operations to countries with more stable trade policies, which could reduce the number of visa applications for skilled workers entering the U.S.
Key Strategies for Businesses & Investors
1. Reassessing Supply Chains & Tariff Classifications
Businesses should conduct periodic reviews of their tariff classifications to minimize costs and ensure compliance.
2. Leveraging Trade Programs & Foreign Trade Zones (FTZs)
Utilizing Foreign Trade Zones allows businesses to defer, reduce, or eliminate certain duties and tariffs, mitigating financial risks.
3. Exploring Alternative Visa Categories
In light of tariff uncertainties, businesses should explore other employment-based visa options such as the O-1 visa for individuals with extraordinary ability.
4. Diversifying Investment Portfolios
Investors considering the EB-5 program should diversify their portfolios to hedge against risks associated with trade wars and shifting immigration policies.
Conclusion
Navigating the intersection of U.S. tariffs and immigration policy requires a comprehensive approach. Trade wars disrupt established business operations, discourage foreign investment, and create obstacles for employment-based immigration programs. Businesses and investors must stay informed and adopt strategic measures to mitigate risks and maintain compliance.
