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Opposition to Greater Tariff Authority for President Expands

Wednesday, January 16, 2019
Sandler, Travis & Rosenberg Trade Report

The U.S. Chamber of Commerce has opposed a bill the White House is reportedly drafting that would expand the president’s ability to increase import tariffs in response to foreign trade barriers. Senate Finance Committee Chairman Charles Grassley, R-Iowa, has rejected the idea as well.

According to a letter from the Chamber to members of the House of Representatives, the draft U.S. Reciprocal Trade Act would effectively give the president unilateral authority to increase tariffs on imports from any foreign country. President Trump has already used existing trade laws to raise tariffs on steel and aluminum imports from virtually all countries on national security grounds as well as thousands of products from China due to that country’s policies on technology transfer, intellectual property, and innovation. Trump has also threatened to further increase tariffs on hundreds of billions of dollars’ worth of imports from China as well as automobiles and auto parts.

The Chamber said it “strongly opposes” the bill because “tariffs are taxes, and they are paid by American families and American businesses.” The letter explained that many U.S. manufacturers depend on foreign sources for materials and components not available domestically or only available in limited quantities or at high prices. As a result, further tariff hikes, not to mention the likely “massive tariff retaliation” from foreign trading partners, would undermine U.S. competitiveness, dampen economic growth, and chill job creation. The bill also raises constitutional concerns, the Chamber said, because it would “abdicate to the executive the extraordinary Congressional power to impose tariffs with no meaningful limit on the President’s discretion.”

Prospects for congressional passage of the bill, if and when it is introduced, already appear dim. The House now features a majority of Democrats who are likely disinclined to give the president additional executive power. Chairman Grassley has similar reservations, telling reporters recently “we ain’t going to give him any greater authority” and “we already gave him too much.”

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