Trump’s trade war
Congress can and should block president’s tariffs on steel and aluminum.
Take a drive on the East Loop over the ship channel bridge and you’ll get an idea what Houston stands to lose in a trade war.
Look at what’s sitting on the docks and in the lots around the Port of Houston. We all know that energy and medicine are central to our city’s economy, but most Houstonians don’t realize how much we have riding on steel.
Our port handled 3.7 million tons of steel last year, more than any other port on the continent. Steel imports and exports jumped 68 percent from the year before, when low oil prices led to drops in demand. The energy industry relies heavily on foreign steel and aluminum producers; it’s estimated that about 10 percent of what independent oil and gas producers spend on their projects is related to steel. Our city is the nation’s top importer of iron and steel pipes, according to data compiled by WorldCity TradeNumbers, and Houston’s stake in that business last year surpassed $1.78 billion.
So when President Trump decided to impose tariffs of 25 percent on imported steel and 10 percent on aluminum, local business leaders smacked their heads and wondered what in the world he was thinking. So did economists and students of history, who pointed out that the president’s assertion that “trade wars are good and easy to win” was just flat wrong.
Alas, so did alarmed members of Congress from his own party, who publicly called upon the president to reconsider. But unlike business leaders and economists, our elected representatives can put a stop to this ill-advised move. Congress can — and should — take action to rescind the Trump tariffs.
Ask officials in President George W. Bush’s administration whether these tariffs are a good idea. Bush tried to help the steel industry in 2002 by raising tariffs on selected steel products. Sure enough, higher prices temporarily helped domestic steel producers. But businesses paying those higher steel prices got hammered, and they ended up laying off droves of employees. A study conducted by Trade Partnership Worldwide estimated that 200,000 Americans lost their jobs, more than 15,000 of them here in Texas. That number is especially striking when you consider that the entire domestic steel industry back then employed only 187,000 workers, fewer than that estimated number of people who wound up in the unemployment line.
Trump’s tariffs promise to raise the prices of everything from beer cans to oilfield drilling equipment to pickup trucks. But they also threaten to trigger a spiral of retaliatory tariffs imposed by other countries. The European Union has already released a list of U.S. exports it threatens to target, including Levi’s blue jeans, Kentucky bourbon and Harley Davidson motorcycles. So the economic consequences of a trade war are impossible to predict.
But Congress has the power — indeed, the constitutional responsibility — to take control of this war before it begins. Article I, Section 8 of the U.S. Constitution gives Congress the authority to levy “taxes, duties, imposts and excises” and “regulate commerce with foreign nations.” The president has the power to impose these tariffs only because a 1962 law granted it to the executive branch, so it can be rescinded by a vetoproof majority vote in the House and Senate.
U.S. Rep. Kevin Brady, R-Houston, led more than 100 House Republicans who signed a letter urging President Trump to reconsider his broad tariffs and focus specifically on “China’s unfair practices” in international trade. That may have influenced the president’s decision to temporarily exempt Canada and Mexico, but that concession doesn’t go far enough.
Our congressional delegation, whose members know these tariffs are a bad idea for Texas, should not abdicate the constitutional responsibility to act as a check on the president. Congress should strip Trump of the power to unilaterally impose these tariffs. Houston, Texas and America have too much to lose in a trade war.
If you don’t believe it, take a drive over the ship channel bridge.