Related Bibliography: US-China trade conflict
Pro
Stops trade conflicts.
Reduces executive abuse of power.
Con
Reduces executive authority of trade that is critical to global free trade
Trump’s use of trade power protects American jobs, especially in manufacturing
Reduces unemployment
Protects the steel industry
Section 232
But over the past century, Congress has shifted many of the powers to raise and lower tariffs to the executive branch (a concentration of power that conservatives now decry).
There are many ways the president can impose tariffs without congressional approval. To name a few:
- Through the Trading With the Enemy Act of 1917, the president can impose a tariff during a time of war. But the country doesn’t need to be at war with a specific country — just generally somewhere where the tariffs would apply. (This is how Richard Nixonimposed a 10 percent tariff in 1971, citing the Korean War.)
- The Trade Act of 1974 allows the president to implement a 15 percent tariff for 150 days if there is “an adverse impact on national security from imports.” After 150 days, the trade policy would need congressional approval.
- There’s the International Emergency Economic Powers Act of 1977, which would allow the president to implement tariffs during a national emergency.
Trump’s White House cited Section 232 of the Trade Expansion Act of 1962, a provision that gives the secretary of commerce the authority to investigate and determine the impacts of any import on the national security of the United States — and the president the power to adjust tariffs accordingly.
In this case, Wilbur Ross, Trump’s commerce secretary, conducted an investigation, which Trump called for last April, into the impacts of steel and aluminum imports. That report was enough legal justification for Trump to bypass both Congress and the independent US International Trade Commission (USITC), which is typically called on to weigh in on proposed tariffs. (When President George W. Bush imposed steel tariffs in 2002 as temporary safeguards, it required USITC oversight.)
General
Lawmakers Seek to Limit President’s Authority to Restrict Imports (2019)
The Congressional Trade Authority Act (S. 287 and H.R. 940), introduced in the House and Senate Jan. 31, would limit the president’s authority to restrict imports on national security grounds under Section 232 of the Trade Expansion Act of 1962.
Currently the Department of Commerce conducts Section 232 investigations, with non-binding input from the secretary of defense. If the DOC concludes that imports of certain goods threaten national security, the president may proclaim trade actions (tariffs, quotas, etc.) to adjust those imports.
A fact sheet on the CTAA states that Section 232 actions have historically been narrow in scope, targeting a few product lines and/or imports from specific countries such as Iran and Libya. In addition, prior to 2018, the last time a president imposed trade actions under Section 232 was in 1983.
However, the Trump administration has used Section 232 to impose 25 percent tariffs on foreign steel and 10 percent tariffs on imported aluminum and to threaten tariffs on auto imports. These actions “have been economically disruptive,” the fact sheet states, causing U.S. importers to pay additional taxes on roughly $23 billion in steel imports and $17 billion in aluminum imports and harming downstream consumers by increasing domestic prices for these products. The tariffs have also damaged U.S. relationships with allies such as Mexico, Canada, Japan, the European Union, and India, many of which have retaliated with their own tariffs against U.S. exports.
In response, the CTAA would limit future Section 232 investigations to goods with applications in military equipment, energy resources, and/or critical infrastructure that also constitute a substantial cause of a threat to impair U.S. national security. In addition, the bill would transfer investigative authority from the DOC, which since 2001 “has used a broad definition of national security to assess imports, explicitly including goods ‘beyond those necessary to satisfy national defense requirements,’” to the Defense Department. The DOC would still determine the appropriate remedy in the event of a positive finding, but remedies would have to be specifically approved by Congress to take effect. Finally, the bill provides for an exclusion process for future Section 232 restrictions that would be administered by the International Trade Commission.
Other provisions of the legislation would (a) repeal the existing Section 232 tariffs on steel and aluminum, and restrictions on automobiles and auto parts if imposed, if Congress does not pass an approval resolution within 75 days after the CTAA’s enactment and (b) require the ITC to report to Congress on the industry-specific and downstream effects of any Section 232 actions taken within the past four years as well as any future Section 232 actions.
Why Trump can raise steel tariffs without Congress (2018)
The Constitution is pretty clear: It’s in Congress’s power “to lay and collect taxes, duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States,” and regulate trade between the US and other countries.
But over the past century, Congress has shifted many of the powers to raise and lower tariffs to the executive branch (a concentration of power that conservatives now decry).
There are many ways the president can impose tariffs without congressional approval. To name a few:
- Through the Trading With the Enemy Act of 1917, the president can impose a tariff during a time of war. But the country doesn’t need to be at war with a specific country — just generally somewhere where the tariffs would apply. (This is how Richard Nixonimposed a 10 percent tariff in 1971, citing the Korean War.)
- The Trade Act of 1974 allows the president to implement a 15 percent tariff for 150 days if there is “an adverse impact on national security from imports.” After 150 days, the trade policy would need congressional approval.
- There’s the International Emergency Economic Powers Act of 1977, which would allow the president to implement tariffs during a national emergency.
Trump’s White House cited Section 232 of the Trade Expansion Act of 1962, a provision that gives the secretary of commerce the authority to investigate and determine the impacts of any import on the national security of the United States — and the president the power to adjust tariffs accordingly.
In this case, Wilbur Ross, Trump’s commerce secretary, conducted an investigation, which Trump called for last April, into the impacts of steel and aluminum imports. That report was enough legal justification for Trump to bypass both Congress and the independent US International Trade Commission (USITC), which is typically called on to weigh in on proposed tariffs. (When President George W. Bush imposed steel tariffs in 2002 as temporary safeguards, it required USITC oversight.
Pro
Vox. Trade Wars Ruin Everything (2019)
- Job creation dropped drastically in May, with initial estimates suggesting a number much lower than what experts had initially predicted. [NYT / Nelson D. Schwartz]
- Only 75,000 jobs were added in May, a stark contrast from the 224,000 from April. Part of the decline was to be expected, as growth in 2018 saw a dramatic boost from major tax cuts and government spending. [USA Today / Paul Davidson]
- Trade wars, however, have become a wild card: Manufacturing and construction added fewer than 5,000 jobs, which indicates that President Trump’s recent trade war with China has negatively impacted blue-collar sectors. [Washington Post / Heather Long and Thomas Heath]
- Manufacturing is especially vulnerable to trade wars because it can “raise costs, disrupt supply chains and depress foreign demand,” according to NPR’s Scott Horsley. [NPR / Scott Horsley]
- Because the data was collected in May, the report doesn’t include the outcomes of tariffs on Mexico — which could add to the destabilization of the economy. [WSJ / Sarah Chaney and Eric Morath]
- The unemployment rate is still low at 3.6 percent, but despite the smaller pool of available workers, wage growth remained stagnant; average hourly increased by only 6 cents. [Reuters / Lucia Mutikani]
- A major takeaway from the jobs report: The economy may have been expanding, but the middle and working classes saw few benefits from it. [Vox / Alexia Fernández Campbell]
How Congress can take back control over tariffs (2019). Politicians (and some economists) disagree about whether trade wars are “easy to win,” about their impact on the domestic and global economy, and about the benefits to the United States from international agreements like NAFTA and the Trans-Pacific Partnership. But there should be bi-partisan agreement that Congress has ceded too much of its authority over tariffs to the president. Some members of Congress on both sides of the aisle are sounding the alarm. Sen. Pat Toomey (R-Pa.) and Sen. Mark Warner (D-Va.) have introduced a bill, with a rigorous definition of national security that requires congressional approval for tariff-related action. Sen. Chuck Grassley (R-Iowa), chair of the Finance Committee, who has called the tariffs on Mexico “a misuse of presidential tariff authority and counter to congressional intent,” has indicated he might support their bill or introduce one of his own. Introduced by Sen. Mike Lee (R-Utah) in 2017, the Global Trade Accountability Act mandates that “unilateral trade actions,” defined as actions prohibiting the importation of an article, increasing or tightening a tariff-rate quota, or altering the terms of existing trade agreements, “shall require congressional approval.”
Congress gave the president too many powers. Now it must scale them back. (2019). To its to-do list, the new Democratic majority in the House should add convening hearings on this area of law, with an eye toward cleaning it up. There’s every reason for the Republican-majority Senate, to the extent it cares more about constitutional balance than partisan interests, to join in. The rise of Mr. Trump has reminded everyone of the potential danger from unchecked power in the executive. That power may be doubly dangerous if the unchecked power has, in effect, been handed to the president by Congress in the past. Perhaps those Congresses could not imagine a truly erratic and irrational figure in the White House. The current Congress has no excuse.
Congress Should Take Back Its Authority Over Tariffs (2019)
Too much of that authority has been ceded. The past 18 months show that Congress needs to reinsert itself into the trade policymaking process again.
The balance of authority favoring the executive branch largely produced positive results for the last 80 years. Every president since Herbert Hoover, Republican and Democrat, supported a general policy of trade liberalization to promote economic growth and as a vital strategic tool to make the world safer. This broad consensus is one of the great bipartisan policy achievements of the post-World War II era, and it largely succeeded in achieving these twin aims.
U.S.-led commercial diplomacy produced valuable trade agreements and institutions like the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO), that have served both U.S. and global interests. By strongly disfavoring unilateral protectionism, the rules-based system sought to minimize beggar-thy-neighbor contagion from spreading the way it did in the early 1930s and to make trade more predictable by establishing an orderly process to resolve disputes.
The Trump administration has firmly rejected this order, preferring an aggressive brand of unilateralism and ad hoc policymaking of the sort the system is designed to minimize. The most egregious example of the administration’s antipathy toward the rules and norms that govern trade policy is its use of so-called national security tariffs under Section 232 of the Trade Expansion Act of 1962. That provision gives the president wide latitude to impose import restrictions if the U.S. Commerce Department determines that importation of certain products jeopardizes U.S. national security. Historically, this authority has been invoked sparingly and judiciously, given the gravity of the claim.
To date, the Trump administration has used Section 232 to impose stiff tariffs on steel and aluminum, and it is threatening to use the statute to levy duties on imported automobiles and automotive parts. Unsurprisingly, this has triggered widespread retaliation against U.S. exports, ensnaring unrelated industries into trade conflicts, and it is fostering distrust among longtime allies.
The national security rationale for the tariffs is exceedingly thin, and President Donald Trump’s own words have undercut the legal justifications articulated by his administration. In one instance, the president tweeted that the tariffs on Canadian steel and aluminum were a response to the country’s protectionist dairy policies. He has threatened Mexico with national security tariffs on automobiles if the country did not adequately address his concerns about immigration and drugs flowing into the United States and continues to threaten the European Union with tariffs on cars unless it bends to his will in prospective trade negotiations. These flagrant abuses of the statute are meant more to pry open foreign markets for U.S. exports than to actually protect national security.
President’s tariff authority must be reduced to restore balance of power (2019).
The Bicameral Congressional Trade Authority Act, introduced by Rep. Mike Gallagher, R-Green Bay, is an attempt to do just that. It would limit the president’s authority to impose tariffs on imports which the Department of Commerce deems a threat to national security. This authority was granted by Congress in the national security clause of the Trade Expansion Act of 1962, Section 232.
Con
Want to See the Section 232 Tariffs in Action? Look Here. (2019). When President Donald Trump implemented the Section 232 tariffs to protect an American steel industry weakened by the global overcapacity crisis, there were doubts about what effect the tariffs would have on stopping the flood of foreign steel into the United States. It is nearly a year later, and positive results are slowly trickling in. That’s good news for an industry so important to our defense industrial base. It is estimated that approximately 11,000 steelworker jobs have been returned to America’s economy. Idled mills have restarted production and new mills are being built.
Tariffs on foreign steel save American jobs (2018). The president’s actions are working. Steel imports fell 34 percent from April to June, prompting job growth. U.S. Steel has restarted facilities in Granite City, Illinois, which means 800 jobs The steel industry contributes over $520 billion a year to the economy and directly and indirectly supports nearly 2 million American jobs. A healthy and sustainable steel industry is vital to preserve the nation’s ability to protect Americans at home and abroad.
American Steelmakers Are Thriving (2018). “Our steel industry is coming back at a level that nobody thought possible. Factories are opening up all over,” President Donald Trump said at the second annual “Made in America” event on July 23. U.S. Steel Corp. restarted two blast furnaces at its Granite City Works in Illinois. The Pittsburgh-based company said it would be fully operational and its steel production would nearly double by October. There have been also facilities restarted in recent months in Lorraine, Ohio; Georgetown, South Carolina; Durant, Oklahoma; Mingo Junction, Ohio; Frostproof, Florida; and Brownsville, Texas. “Despite objections over the Section 232 tariffs from foreign producers and governments, the tariffs are on track to accomplish what they were intended to do,” Commerce Secretary Wilbur Ross wrote in an op-ed for Cleveland.com.
Executive Trade Policy Authority: A Threat to America’s Global Leadership on Trade (2018). Ultimately, it would be a cruel irony if Congress fully rescinded their delegation of executive trade policy authority. While rejecting the extreme protectionism of the current Executive, it would undermine the Executive authority that fundamentally supports today’s integrated global trade system and the global prosperity it has created.