A new report from the Cato Institute argues that several laws authorize the president to impose tariffs on a wide range of imported goods without substantial procedural or institutional safeguards. “One can reasonably argue that Congress did not intend for a president to use these laws” as Republican nominee Donald Trump is now promising, the report states, “but their broad and ambiguous language could let a future president plausibly claim otherwise.”
The report notes that following the “disastrous” Smoot-Hawley tariffs of 1930 that “inflicted serious damage to the U.S. economy and international relations,” Congress delegated large amounts of its international economic authority to the executive branch to minimize the chances of a similar misstep. This bipartisan approach proved successful until 2016, when President Trump used those delegated powers “to take a series of unilateral actions that radically upended U.S. international economic policy,” including tariff hikes on steel and aluminum from virtually every country as well as on more than half of all goods from China. In his presidential campaign this year Trump “has promised even more aggressive unilateral protectionism in the future,” including “an across-the-board 10–20 percent tariff on all imports from every country and a 60 percent tariff on all imports from China.”
While some have sought to temper concerns about this threat by asserting that there are practical and legal constraints that would prevent Trump (or any future president) from enacting broad tariffs without congressional consent, the report asserts that “such confidence is mostly misguided.”
The report explains that several laws provide the president with “vast and discretionary authority to unilaterally impose sweeping trade restrictions.” Some of these are familiar to the trade community because of their recent use. Section 232 of the Trade Expansion Act of 1962 allows the president to restrict imports determined by the Bureau of Industry to represent a threat to national security, though the only time this law has been used to impose tariffs is when Trump targeted steel and aluminum imports in 2017. Section 301 of the Trade Act of 1974 allows the imposition of tariffs or other trade restrictions on a wide set of products imported from a targeted country or countries to address harmful foreign economic policies. This law was heavily used in the 1980s but was largely dormant after that until Trump used it to levy tariffs on imports from China.
Other laws include tariff authorities as well, even though none of them has ever been used in this manner. The International Emergency Economic Powers Act of 1977 grants the president wide discretionary authority to address threats to national security, foreign policy, or the domestic economy from a source outside the U.S. Section 338 of the 1930 Tariff Act authorizes new or additional tariffs of up to 50 percent on imports from countries that have discriminated against U.S. commerce, and if the discrimination continues the president may block such imports entirely or expand the trade restrictions to third-party countries that benefit from the discriminatory conduct. Section 122 of the 1974 Trade Act could be used to unilaterally implement a 15 percent global tariff for 150 days to address “large and serious” balance-of-payments deficits.
Moreover, the report asserts, recent history indicates that lawmakers and courts “may be unable or unwilling” to constrain the use of any of these laws. Legislation to require congressional review and approval of presidential tariff actions has been introduced in Congress but has gained little support and has never received a floor vote. For their part, federal courts have ultimately sided with the executive branch in every case thus far involving existing Section 301 and Section 232 tariffs and “have proven especially deferential to tariff cases involving Section 232 and national security.” While a Supreme Court decision earlier this year limiting judicial deference to federal agency decisions “might provide a glimmer of hope” for reining in presidential tariff powers, the report states, “caution and concern remain warranted.”
“The only sure way to limit the risk of future unilateral tariffs,” the report concludes, “therefore rests with Congress acting to reclaim some of its constitutional trade powers.” Although doing so “would be a heavy lift,” Congress could act after the November election and before the 118th Congress adjourns, “a time in which a lame-duck President Biden might be more willing to eschew a veto and sign a law that enacts an important reform that would not apply to him personally.”
If your company is interested in aiding efforts to enact such legislation, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.
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