Trump to push US constitutional and legal boundaries in second presidency

William Roberts, IBA US Correspondent

President-elect Donald Trump speaking in Arizona, August 2024. Gage Skidmore/Flickr

As Donald Trump prepares to assume the US presidency for a second time, he’s moving to bypass constitutional norms and centralise power.

Trump has called on Senate Republicans, who will control the upper chamber in January, to forego confirmation hearings and recorded votes for his cabinet nominees. It’s an unusual step but not surprising. 

Those seeking the Senate leadership position ‘must agree to Recess Appointments…without which we will not be able to get people confirmed in a timely manner,’ Trump said in a social media post. ‘Sometimes, the votes can take two years, or more. This is what they did four years ago, and we cannot let it happen again.’

Trump is expected to push constitutional and legal boundaries in his second term as president, as he did from 2017 to 2021 – pushback is expected. The ability of US courts to constrain him will depend on whether Trump’s actions breach legal boundaries or mere norms of political conduct, says Michael L Novicoff, a Member of the IBA Litigation Committee Advisory Board and a partner at Pryor Cashman in Los Angeles.

Trump’s agenda raises tough questions about governing norms and the rule of law that may well reach the courts. ‘There are going to be a lot of court challenges, for sure. But the courts will have very limited ability and probably also limited interest in enforcing alleged norms as opposed to actual laws – particularly in a time when it’s very clear that there is no real consensus in America about what those norms are any more,’ Novicoff says. ‘And as far as actual laws go, the President-elect’s party may emerge from this election in a position to simply write new laws to overcome any potential judicial objections to their desired outcome.’

‘The rule of law is going to be under assault,’ says William Howell, the Sydney Stein Professor in American Politics and Director of the Center for Effective Government at the University of Chicago. ‘This is a former president and now President-elect who flouts norms and the Constitution and political institutions in all sorts of ways. And does so, not begrudgingly, but it’s at the centre of his project, which is one of disruption and grievance and trying to upend the political order that he sees as totally discredited,’ he adds.

Indeed, during his campaign, Trump suggested he would be a dictator for his first day in office and would issue a raft of executive orders reversing the policies of his predecessor President Joe Biden. A draft order reportedly circulating among Trump’s advisers would enable the removal of top US military generals not seen as aligned with Trump’s ‘Make America Great Again’ movement.

During his campaign, Trump talked about weaponising the Department of Justice to go after his political enemies with prosecutions, to impose retribution on those involved in the cases against him. ‘There’s a concern about lack of accountability in various dimensions, because a lot of the softer normative enforcement mechanisms for certain core principles of government that people rightfully think are important and value haven’t had the same sway with President Trump in the past and probably won’t in the future,’ says Scott R Anderson, a fellow in Governance Studies at the Brookings Institution in Washington, DC, and a senior fellow with the National Security Law Program at Columbia Law School.

Trump plans mass deportations of millions of undocumented migrants, a project that would probably require the internal deployment of the US military and turn the country into a police state. In mid-November Trump confirmed he planned to utilise the military to assist in the deportations. 

He has also talked about bringing a quick end to Russia’s war in Ukraine, perhaps by withholding congressionally mandated military and financial aid. His remarks on NATO have raised concerns about his commitment to the alliance. And he’s threatened to unilaterally impose very substantial trade tariffs on China and the EU.

Trump has allied himself with billionaire Elon Musk who, alongside former Republican presidential candidate and biotech investor Vivek Ramaswamy, has been given an advisory role ‘outside of government’ in Trump’s team. They are preparing to slash regulations, restructure federal agencies and ‘dismantle government bureaucracy,’ according to Trump. ‘This will send shockwaves through the system,’ Musk said in a statement issued by Trump.

The idea will be familiar to the authors of the ‘Project 2025’ document, developed by think tank the Heritage Foundation and contributed to by former Trump advisers, which asserts controversially that the entire US executive branch falls under the control of the president, not Congress. 

Howell warns that the plans are an ‘all-out assault on the administrative state’, which, he says, Trump intends ‘to cripple and sabotage […] so that it can’t do anything at all.’ Musk denied suggestions that the plans are a threat to democracy, asserting instead that they target ‘bureaucracy’. 

All this makes Trump’s bid to bypass the Senate’s confirmation process dangerous. The Constitution says Cabinet officers must be confirmed with the ‘advice and consent of the Senate’. 

For top government positions, the process involves background checks, one-on-one meetings with senators and public hearings. Those hearings often surface important policy debates about the statutory mandates of federal agencies and would give opposition legislators a chance to voice their views. 

If Senate Republicans cede their confirmation powers to Trump, this would violate well-established American norms but isn’t explicitly illegal.

Meanwhile, the Supreme Court’s ‘separation of powers’ doctrine, as seen in the Court’s July judgment granting Trump broad presidential immunity from criminal prosecution, means legal limits on his official conduct are now unclear.

Mexico’s nearshoring boom threatened by judicial reforms

Ann Deslandes

Mexico City, Mexico. Alex Wolf/AdobeStock.com

In recent years the Mexican government has bet on nearshoring – here, the practice of moving manufacturing and/or other functions of an Asian, European or North American company to Mexico – to boost the country’s economy. However, Mexico’s recent judicial reforms – which have led to rule of law concerns and, consequently, have implications for business confidence – may now threaten the nearshoring boom.

Nearshoring allows companies to bypass US tariffs on China, plug holes in the supply chain caused by the Covid-19 pandemic and war-related disruptions, pay lower prices for labour and have physical proximity to consumers in the US as well as time zone alignment with other parts of the business. The rise in companies nearshoring to the country since 2022 has been called ‘the new Mexican miracle’.

The border closures in Asia and shipping slowdowns of the Covid-19 pandemic ‘showed that you have to be closer to your trading partners’, says Emilio Arteaga, Conference Quality Officer of the IBA International Trade and Customs Law Committee and a partner with the Mexican trade law firm Vázquez Tercero & Zepeda. Further, with the imposition of tariffs on China by the first Trump administration in the US, ‘Mexico became the United States’ biggest trading partner’. 

The government of President Andrés Manuel López Obrador (AMLO), who was recently succeeded by his protege Claudia Sheinbaum, supported the nearshoring push, announcing tax incentives for companies engaging in nearshoring and increasing the minimum wage for workers, a requirement of the US–Mexico–Canada free trade agreement (formerly ‘NAFTA’ and now known as ‘USMCA’). The phenomenon is particularly concentrated in the northern border state of Nuevo León, with electric vehicle giant Tesla among several major companies to establish manufacturing operations in Mexico in 2023. According to analysis by consultancy Deloitte, published in May, $39.9bn of investment in Mexico announced since 2021 has been related to nearshoring. 

For investors, the benefits of nearshoring must be, as always, balanced with the risks of doing business in a certain jurisdiction. Business risk analyses between 2021 and 2023 included a high level of concern about public security and government inefficiency in Mexico – and an increasing worry about legal uncertainty and the concentration of executive power.  

Concerns about the latter have intensified in recent months, with the credit agency Moody’s downgrading the Mexican government’s debt outlook from ‘stable’ to ‘negative’ in mid-November, citing the potential weakening of the judiciary and of checks and balances as a result of reforms passed before the end of AMLO’s term in October. The government’s ‘Judicial Reform’ includes the appointment of judges by popular election and a reduction in the capacities and oversight of the Instituto Nacional Electoral, the country’s electoral commission. The goal of the reforms, according to the government, is to target corruption and make the judiciary more responsive to the will of the people.  

However, critics have spoken out against the reforms. For example, in his opening address at the IBA Annual Conference in Mexico City in September, Ernesto Zedillo, President of Mexico from 1994–2000, referred to the changes as ‘a set of constitutional reforms that will destroy the judicial branch and, with it, bury Mexican democracy and what remains of its fragile rule of law’. 

A weakened rule of law can increase the exposure of businesses to complicity in organised crime, explains Yussef Nuñez, a policy analyst at advisory company Emerging Markets Political Risk Analysis and a lecturer on economic globalisation at Mexico’s Anahuac University. In regards to the move to have judges appointed by popular election, ‘there’s a fear that criminal groups could push their own candidates’ in order to exert control over territory, as they’re known to do at local levels of government in Mexico. 

Further, the Mexican judiciary is now prohibited from issuing general injunctions against laws and regulations in response to constitutional challenges. ‘It may be more difficult’ for businesses to lodge or contest injunctions brought against them, if judges are popularly elected and required to make decisions in the name of ‘the will of the people’, as opposed to on points of law, Nuñez adds. 

Luis Armendariz, a partner with the cross-border business and transactions firm De Hoyos Avilés in Mexico, says that any ‘reduced independence or increased politicisation’ of Mexico’s judiciary ‘might compromise the fair and impartial resolution of disputes’. He adds that ‘these factors could lead to concerns about the predictability of outcomes in commercial disputes, affecting investor confidence’. 

Rule of law concerns are one of a matrix of elements that businesses consider in making the jump to Mexico, says Armendariz. He highlights that it’s still very early in the process and that he and his colleagues will be watching closely to ‘see how the reform is implemented’. He explains that the firm is ‘advising clients that in this case the predictability of outcomes in judicial proceedings is going to be more complex, and [the firm is advising] on the measures they can take to address such risk’. These measures include ‘strategies that limit exposure to domestic judicial processes’, arbitration clauses to ‘maintain control over legal aspects’ and ‘neutral jurisdictions for dispute resolution when possible’. 

Arteaga expects that ‘companies will continue to do business in Mexico’ despite concerns about the impact of the Judicial Reform. He says this is particularly the case in the manufacturing sector, which is ‘the industry receiving the highest amount of foreign direct investment’ and, being subject to less regulation, ‘may not see the reform as a huge risk’.  

At the same time, Arteaga believes that any increased exposure to corruption as a consequence of the Judicial Reform will be of concern to ‘foreign investors that have anti-corruption laws that go beyond their borders’, such as the UK. For them, it may become ‘very important for those companies to be fully compliant.’ 

For Nuñez, maintaining cheaper labour costs in Mexico will be key to nearshoring’s future success. ‘This is still why some companies prefer to come here’, he explains, weighing it up against ‘public security risk, lack of energy, electricity and water resources, and any political uncertainty that we’re currently facing’ – a reference to the incoming second Trump administration in the US.