Free Trade

Congress Passed a New North American Trade Pact but Failed To Limit Trump's Tariff Powers

Republicans might rue that mistake when Elizabeth Warren or Bernie Sanders inherits Trump's beefed-up trade authority.

|

The newly passed North American trade deal has some serious flaws, but the agreement's passage through Congress is a welcome sign that there will be greater stability for companies doing business across the continent.

At least until President Donald Trump lashes out again.

In approving the new United States–Mexico–Canada Agreement (USMCA) last week, Congress missed an opportunity to put some much-needed limits on the president's unilateral authority to issue tariffs for specious "national security" reasons. That's despite the fact that prominent Senate Republicans repeatedly signaled their intention to use the USMCA as an opportunity to attach provisions that would prevent presidents from taking brash actions to raise trade barriers, as Trump did in March 2018 when he suddenly slapped new tariffs on imported steel and aluminum.

Those tariffs were imposed by invoking Section 232 of the Trade Expansion Act of 1962, which grants presidential authority to quickly impose tariffs on national security grounds. Pretty much everyone besides Ron Vara agrees that imported aluminum and steel are not threats to American national security, so Trump's actions served mostly to highlight the vast powers presidents have to dictate the terms of trade.

"I'm certainly not confident that the USMCA prevents the president from taking other actions that could undermine the trading relationship with our two largest trading partners," says Inu Manak, a research fellow for trade policy at the Cato Institute.

Start with what's missing from the deal itself, Manak says in a recent episode of the Cato Daily Podcast. The deal does not grant Canada and Mexico an exemption from future Section 232 tariffs—though it did grant a partial exemption to the existing steel and aluminum tariffs. But Trump has repeatedly talked about imposing similar "national security" taxes on cars imported from Europe or Mexico, bringing the idea up again just this week while meeting with world leaders in Davos, Switzerland.

"So the president could technically still impose tariffs on Canada and Mexico on other issues that he thinks are a concern for national security," Manak says. "At the end of the day, there's still a lot of uncertainty left over, and a lot of leeway for the president to do what he wants."

This issue goes beyond Trump. In the first 54 years that Section 232 was on the books, presidents had invoked its powers only six times. Trump's repeated use of it to reshape global trade is effectively redefining the law's powers away from concerns about national security and turning Section 232 into just another tool for presidents to make policy.

That's one reason some members of Congress—mostly Republicans, but some Democrats too—have been wary about Trump's unilateral tariffs. Even the ones who don't disagree with what he's doing worry about what might happen when someone else is in the White House.

For a long time, it looked like Sen. Chuck Grassley (R–Iowa) was willing to play hardball with Trump to limit presidential tariff power. Grassley chairs the Senate Finance Committee, which handles trade issues, and he threatened to block Trump's USMCA deal unless the White House lifted the tariffs on steel and aluminum from Mexico and Canada. Trump backed down.

Grassley also said repeatedly that he was considering legislation to stop Trump's abuse of Section 232. "Congress has delegated too much authority to the president of the United States," Grassley told reporters in June. "This is not about Trump. It's about the balancing of power."

By late August, Grassley was saying the Senate Finance Committee would soon consider two bills to limit Trump's Section 232 powers: the Bicameral Congressional Trade Authority Act, sponsored by Sens. Pat Toomey (R–Penn.) and Mark Warner (D–Va.), and the Trade Security Act, sponsored by Sens. Rob Portman (R–Ohio) and Doug Jones (D–Ala.).

The Toomey-Warner bill is the better of the two. It would give Congress the ability to block future tariffs imposed under Section 232, limit the the definition of "national security" in the law, and require the Pentagon to sign off on the tariff declaration—as opposed to the Commerce Department, which handles it now. Congress would have 60 days to review and vote on any proposed Section 232 tariffs.

The Portman-Jones bill would require Congress to pass a resolution disapproving of a tariff in order to revoke it, while Toomey-Warner would require congressional assent before tariffs could be imposed. This would essential force Congress to be part of the discussion, removing the possibility that a do-nothing legislature would allow a president to act unilaterally.

By November, it was becoming clear that Trump's USMCA would pass through Congress without reforms to Section 232. Grassely, in remarks given on the Senate floor, said the reforms had been delayed by "stakeholders who are profiting from tariff protection" and colleagues who don't want to upset Trump.

Earlier this month, Politico reported that Grassley still sees Section 232 reforms as a top priority for 2020. But in passing the USMCA without adding limits to Section 232, Congress may have given away its best leverage to force changes. After all, Trump can veto whatever bill might eventually pass—and if Grassley is having this much difficulty simply getting some reforms out of his committee, it's unlikely there is enough support to override a presidential veto.

That is how presidential power expands. Congress delegates poorly. Presidents gradually ignore limits on how their power can be used. Then they pass along an aggrandized executive branch to the next guy (or girl) in line.

Congressional Republicans may regret their passive response to Trump's Section 232 abuses when a President Sanders or Warren imposes tariffs for his or her own protectionist reasons—or to fight emissions, as some on the left are already suggesting. But they'll only have themselves to blame.

NEXT: Michelle Carter Released from Prison Early

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. I don’t know that they will regret it. It seems to me that the MO of Congress is to maximally delegate its powers (constitutional or not) and then also delegate blame for any and every thing that goes wrong.

  2. I believe that Trump does not have powers not used by recent presidents and that will not be used by future ones. Against all reason, your arguments – valid ones – should be against the office, not the man.

    1. While I agree that this larger then the current president; it still doesn’t excuse him of violating his oath of office to uphold the constitution.

      1. What violations again for the record?

        1. SECTION 8. Clause 1. The Congress shall have 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; but all Duties, Imposts and Excises shall be uniform throughout the United States.

          No amendment yet to Constitution allowing the president to make his own taxes.

          1. Congress delegated their power. You lose.

            1. Unconstitutional. Congress can not admend the constitution by simply voting on a law. We have a process for admending the constitution. It was not followed.

              1. Of course congress has the constitutional power to delegate its powers. Government couldn’t function without it.

      2. “…it still doesn’t excuse him of violating his oath of office to uphold the constitution.”

        Making up fantasies is a common symptom of TDS. There is help available, but first, you’ll have to admit that you’re full of it.

        1. No TDS here, just a health respect for the Constitution. Didn’t think I see the day when libertarians or Republicans would argue for Executive branch taxation/tariffs. But then again we live in strange days.

          1. If Trump had gone to Congress and requested that they give him the authority to use tariffs within a defined scope that stated which countries, the highest maximum rate and limited it to defined period; I’d say that would be acceptable. Him doing it unilaterally is dictatorial and should be opposed. We live in a Republic after all with clear delineations of enumerated powers.

            1. Which Congress has delegated.

  3. There is now ample evidence that tariffs can be used to get trading partners to lower their trade restrictions.

    Boehm had a sad.

    1. Another great meeting of Libertarians For Tariffs And Protectionism has been convened.

      By the vanquished, disaffected, ready-for replacement, bigoted faux libertarians.

      1. Who are running things. Vanquished yet somehow in charge.

  4. “…when Elizabeth Warrer or Bernie Sanders inherits Trump’s beefed-up trade authority.”

    What he’s smoking? I don’t want any of it.

  5. Republicans might rue that mistake when Elizabeth Warrer or Bernie Sanders inherits Trump’s beefed-up trade authority.

    What possible fucking difference would it make? Obama obligated the United States to two international treaties by executive fiat and had it underwritten by the judiciary. If you’re going to get steamrolled anyway you might as well have some fun.

  6. Oh also

    USMCA IMPLODING!!!!!!!!!!!

    1. There it is.

  7. All libertarians know that tariffs impact the country imposing them negatively.

    THAT SAID

    Trump isn’t necessarily using tariffs to protect US business interests, he’s using them as a cudgel to get fair trade deals passed. This is a novel use of tariffs that we haven’t seen before and Boehm is completely ignoring the reasoning behind Trumps actions.

  8. Unfortunately it’s the working stiff that always pays the price..

  9. Well we can’t expect them to limit powers they hope to one day wield.

  10. are those yellow drapes part of an Amendment or something? somebody should burn them

    1. Trump has a thing for “gold” decor.
      It’s not his best quality

      1. You know who else had a thing for gold decor?

        Hint: he also liked golf and “pussy”

  11. It provides protection to your data by encrypting the information over the internet.
    http://antimcafee.com/

  12. webroot geek squad download Now, this great antivirus has been installed on the system. This is the first step for the protection of your PC against all the possible instances of problems and suspicious sources that can possibly find a way into your system, breaking the safer route.http://techno-geeksquad.com/

  13. Congress has no authority over tariffs in any case you fuckhead uneducated idiot.

  14. If Warren or Sanders becomes president, tariffs with Mexico are the least of our worries.

    Also, the fact that globalist Republicrats want unidirectional open borders isn’t much of an argument for them.

Please to post comments

Comments are closed.