Congress must retake powers over trade
Recently, the United States Supreme Court declined to take up a challenge to the Trump administration’s steel tariffs.
While this avenue for potentially striking down the tariffs is now off the table, the fact remains that the tariffs are bad policy and not even good politics on the part of the president. Congress should assert its constitutional powers on trade and scale back the ability of any president to unilaterally impose tariffs.
The challenge brought by the American Institute for International Steel, a trade association for steel importers and companies that use imported steel, challenged the president’s 25 percent tariffs on steel imports. The group argued the tariffs should be voided because the law that authorized them “unconstitutionally delegates legislative power to the president.”
At issue is Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs on national security grounds. While President Trump has largely touted tariffs as necessary to revitalize the American economy or as a tool to leverage more advantageous trade agreements, officially the administration has invoked Section 232’s national security powers to justify the tariffs.
This is not the first that
Section 232 has been challenged in court. A 1976 Supreme Court case, Federal Energy Commission v. Algonquin SNG Inc., dealing with oil imports, concluded with the Supreme Court upholding the constitutionality of Section 232. Still, the Constitution is unambiguous about which branch of the government is to regulate trade. Article One, Section Eight plainly states that it is Congress’ power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.”
Congress, as it has on a number of issues, has chosen to cede part of this authority to the executive branch. This allows Congress to avoid making tough calls while wrongly leaving significant policy decisions to the whims of presidents. Congress has the power to regain their authority.
And it should. Tariffs, it should be remembered, are just taxes on American consumers.
Taxes on steel imports and other goods don’t meaningfully protect national security, but they do result in higher costs to importers and companies that rely on imports. According to the Tax Foundation, Section 232-justified tariffs on steel and aluminum are a net negative to both long-run GDP and to wages, and they destroy jobs. It should be remembered that even if supporters of tariffs can point to “new” or “saved” American steel jobs as a result of tariffs, what’s not being seen are the number of jobs lost or never created because of the higher cost of steel.
It is unfortunate that the president sees trade as a zerosum game. It’s not. Global trade has undeniably been a net positive for Americans and people around the world.
Congress should do its job for a change and retake its constitutional authority over trade policy.