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Strict Limits on Presidential Tariff Authority Sought by Consumer, Business Groups

Wednesday, March 20, 2019
Sandler, Travis & Rosenberg Trade Report

Dozens of business, consumer, and public interest groups are asking the Senate Finance Committee to impose strict limits on the president’s authority to impose import tariffs in legislation currently under development. Committee Chairman Charles Grassley, R-Iowa, is reportedly working to craft a bill that draws from two measures already introduced in the House and Senate and is able to generate sufficient congressional support to override a potential veto by President Trump.

The Congressional Trade Authority Act would limit the president’s authority to restrict imports on national security grounds under Section 232 of the Trade Expansion Act of 1962. Specifically, 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. The bill would also transfer investigative authority from the Department of Commerce 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. In addition, the bill would (1) provide for an exclusion process for future Section 232 restrictions that would be administered by the International Trade Commission, (b) 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 (c) 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.

The Trade Security Act would take what is generally seen as a less stringent approach. Under this bill the DoD would justify the national security basis for any new Section 232 tariffs rather than the DOC. If a threat is found and the president wants to respond, the DOC (in consultation with the DoD and the Office of the U.S. Trade Representative) would develop recommendations and the president would decide whether or not to act on them. This legislation would also expand the ability of Congress to disapprove of a Section 232 action after it is imposed by passing a joint resolution, which is currently limited to actions on oil imports.

In a March 18 letter to Grassley and Committee Ranking Member Ron Wyden, D-Ore., the groups signaled their support for a bill more like the CTAA, asking the two leaders to prioritize the following principles in a final bill.

- Congress should have to affirmatively approve any tariff increases proposed by the president before they are allowed to take effect and efforts to further delegate authority to impose tariffs to the executive branch, including reciprocal or retaliatory tariffs, should be rejected.

- The bill should apply to all instances in which the president has been delegated authority to impose tariffs, and tariffs on a particular type of import should not be specifically excluded from a congressional approval process.

- The International Trade Commission should submit to Congress and make publicly available a comprehensive assessment of the impact of a proposed tariff on the U.S. economy, including consumers and producers, not simply the affected industry.

- The term “national security” should be specifically defined in law to guide investigations for proposing Section 232 tariffs, and proposed barriers to trade under this authority should only be implemented for narrowly tailored, well-defined national security interests.

- The DoD should conduct any national security investigation and determination under Section 232 (in consultation with other agencies) and such determinations and any relevant information should be made available to Congress.

- Transition rules to provide for congressional consideration of tariffs imposed prior to enactment of the legislation should be considered.

For more information on these measures, please contact Nicole Bivens Collinson at (202) 730-4956.

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