The intersection of trade and immigration: how tariffs

Over the past month, attorneys practicing international trade and immigration laws have found themselves struggling to cope with the turbulent shift in U.S. tariff policies. This article aims to clarify the impact of these evolving tariffs on the U.S.’s ability to attract foreign investment, the consequences of employment-based visas, and the broader consequences for international businesses and investors seeking to establish a foothold in the U.S.

Also Read: U.S. inflation and tariff policy challenges the Federal Reserve

Legal authorizations and tariffs that affect immigration

The president appears to rely on the International Emergency Economic Powers Act (IEPA) to announce (and then revoke) tariffs, especially those on Canada and Mexico. Although the IEPA does not explicitly mention tariffs, tariffs or import restrictions, it grants the president broad power to regulate foreign economic transactions in the event of a national emergency.

The government linked the recent tariff action to the fentanyl crisis and asserted that Mexico and China have not done enough to curb the production and distribution of precursor chemicals. These tariffs, in turn, disrupt supply chains, increase the costs of businesses relying on cross-border trade, and create uncertainty for investors considering entry to the U.S. market.

On March 14, 2025, U.S. Secretary of State Marco Rubio issued a declaration in the Federal Gazette. In this statement, Secretary Rubio asserted “All efforts by any agency of the federal government, controlling the status of the people, entering and exiting, and transfer of goods, services, data, technology and other items within the borders of the United States constitute the diplomatic affairs of the Administrative Procedure Act Nos. 553, 553, 5544.”

The statement is justified by the noticeable expansion of the State Council’s powers. Traditionally, U.S. sanctions policies such as ITAR and EAR have been the authority of the U.S. Department of Commerce, but such statements seem to usurp that authority.

By classifying trade regulations such as tariffs, export controls and import restrictions as part of the foreign affairs function, the statement means that these policies can be implemented without following the standard rulemaking procedures under the APA. This can allow executive departments (e.g., the President, the U.S. Trade Representative, or the Department of Commerce to adjust tariffs, impose trade restrictions or regulate imports, exports/exports faster without the need for frequent and frequent public comments and review processes.

As courts often limit legal challenges to businesses and trading partners to administrative authorities in foreign affairs, legal challenges may also be limited.

At least, this claim means that such efforts are inherently linked to national security and foreign policy considerations. By categorizing these actions for the exemption of functions in foreign affairs, the government aims to protect its policies from judicial review and procedural requirements commonly prescribed by the APA. This has a significant impact on immigration as it can accelerate the implementation of restrictive policies without standard notice periods, thus limiting the pathways to legal challenges. Furthermore, this approach raises concerns about transparency and due process, especially for businesses and individuals relying on a consistent regulatory framework for trade and immigration programs.

Tariffs, Trade Wars and the Future of USMCA

The current trade war with Canada and Mexico was a model set during the first Trump-led administration, which led to renegotiation of the North American Free Trade Agreement and the establishment of the United States-Mexico-Canada Agreement (USMCA). The USMCA, which came into effect in 2020, strengthened labor and environmental standards, redefined the rules of origin for the automotive industry, and expanded the opportunities for U.S. farmers to enter the Canadian dairy market. However, the agreement will undergo a mandatory review by July 2026.

Ongoing tariff disputes threaten the stability of the USMCA and create an unpredictable business environment. The new tariff policy could lead to retaliation measures in Canada and Mexico, further straining cross-border economic activity and affect immigration policies that promote labor mobility and investment-driven immigration.

Impact on immigration visas to promote inbound investments into the United States

TN Visa and USMCA

The TN visa category originally created under NAFTA and remained under USMCA allows professionals in Canada and Mexico to work temporarily in the United States such as engineering, health care and finance. Although the USMCA maintains the TN visa framework, the unpredictable nature of trade negotiations has raised concerns about potential restrictions on future amendments.

• TN visa revision risk: If tariffs continue to escalate, Canada and Mexico may push for renegotiations that affect labor mobility. This could lead to stricter eligibility standards, administrative barriers or outright restrictions on TN visa renewal.
• Economic Impact: Many industries in the United States, especially healthcare and technology, rely on TN visa holders. Changes in visa availability may exacerbate labor shortages and disrupt business operations.

E-1 Treaty Trader and E-2 Treaty Investor Visa

E-1 and E-2 visas are granted to individuals who engage in large amounts of trade or investment between the United States and their home country, and are particularly vulnerable to tariff instability.

• Trade-based visa challenges: E-1 visas require “substantive trade” between the United States and treaty countries. If tariffs significantly increase the cost of import and export, it may be difficult for companies to maintain the required trade volume, resulting in potential visa rejection or non-renewal.
• Investment uncertainty: The E-2 visa requires applicants to make “large” investments in U.S. businesses. Unpredictable tariff environment prevents foreign direct investment (FDI), reducing the number of applicants willing to take risks in the United States

EB-5 Immigration Investor Program

The EB-5 visa program grants permanent residence to foreign nationals, investing at least $800,000 in U.S. businesses that create jobs in the United States, is another area of ​​the impact of the trade war.

• Investment flow declines: Uncertain trade policies and potential retaliation measures in other countries make the United States an attractive for investors.
• Project delays and cost increase: Tariffs on importing building materials from China, Canada and Europe directly affect EB 5-funded real estate and infrastructure projects, increasing costs and reducing profitability.

H-1B and L-1 visas: Impact on multinational corporations

Multinational corporations relying on H-1B and L-1 visas face other challenges due to the trade war.

• Increased employer costs: Companies relying on global supply chains may increase operating costs due to tariffs, reducing recruitment of foreign workers.
• Operational relocation: Some businesses are considering moving their businesses to countries with more stable trade policies, which could reduce the number of visa applications for skilled workers entering the United States

Key strategies for businesses and investors

1. Reassessment of supply chains and tariff classifications

Businesses should regularly review their tariff classifications to minimize costs and ensure compliance.

2. Utilizing Trade Plans and Foreign Trade Zones (FTZ)

Utilizing foreign trade zones allows enterprises to postpone, reduce or eliminate certain responsibilities and tariffs, thereby mitigating financial risks.

3. Explore alternative visa categories

Given the uncertainty of tariffs, businesses should explore other employment-based visa options, such as O-1 visas for people with extraordinary abilities.

4. Diversified portfolio

Investors considering EB-5 programs should diversify their portfolios to address risks associated with trade wars and immigration policies.

in conclusion

Navigating the intersection of U.S. tariffs and immigration policies requires a comprehensive approach. The trade war undermined established business operations, blocked foreign investment and created barriers to employment-based immigration programs. Businesses and investors must remain informed and take strategic measures to mitigate risks and maintain compliance.