Congress Should Reassert Authority Over Trade Policy
The new Republican Congress is excited to work with President Trump on tax reform, repealing Obamacare, and reining in unnecessary regulations. But how will they deal with issues where there is strong disagreement? President Trump has pilloried the longstanding conservative commitment to free trade. Will a Congress led by free traders roll over and let the new president chart a protectionist course by raising tariffs and retreating from the global trading system? Or will they fight back to protect free markets?
Since World War II, a bedrock principle for the United States has been expanding open markets. This has served our domestic and international interests well. Yet few issues seem to have drawn more unfounded criticism in recent years than free trade. Criticism of trade has become a proxy for economic anxieties and cultural grievances — some legitimate, much of it not.
President Trump’s trade rhetoric appears to stem from genuinely convictions. Since his election, he has withdrawn the United States from the Trans-Pacific Partnership and appointed protectionist-leaning officials to lead the Department of Commerce and the Office of the United States Trade Representative. Thus broad-scale trade liberalization looks like a nonstarter in the current political environment. The real concern, however, is whether the Trump administration will impose discredited protectionist measures through unilateral actions.
Article I, Section 8 of the U.S. Constitution gives Congress the power to impose tariffs and duties and to regulate international commerce. But Article II gives the president the power to negotiate international trade agreements. This constitutional construct makes sense: trade agreements would be virtually impossible to negotiate if foreign countries had to deal directly with 535 members of Congress. To better facilitate trade pacts, Congress can — and has — ceded some authority to the executive branch with the general expectation that the president would use it to improve trade and strengthen diplomatic relationships.
Unfortunately, the specter of protectionism is now higher than it has been since the Great Depression. President Trump has suggested levying massive tariffs on imports from China and Mexico as well as floated the possible imposition of a blanket 5 to 10 percent tariff on all imports, regardless of country of origin. Congressional leaders have expressed deep misgivings about these ideas, but they have limitedpowers to stop such actions.
Most experts agree that President Trump has broad unilateral authority to impose or raise tariffs without any input from Congress, at least under certain conditions. Such unilateral actions could trigger a trade war that would devastate our economy and shake the foundation of the global trading system. Rather than hoping the World Trade Organization will strike down ill-advised tariffs — and that President Trump would respect its rulings —free traders in Congress should look to an alternative way to push back against executive branch protectionism.
Sen. Mike Lee (R-UT) recently introduced the Global Trade Accountability Act, which would require congressional approval of unilateral actions taken by the executive branch that institute or increase tariffs. This process would be similar to the one established by the REINS Act, which requires Congress to affirmatively approve any “economically significant” regulations. The REINS Act has become an article of faith among conservatives on Capitol Hill, and Senator Lee’s bill should be viewed in the same light. Like the REINS Act, the Global Trade Accountability Act would help restore balance between the elected branches of government as well as protect our economy from costly executive actions.
Congress should look for areas of agreement with President Trump. There are plenty of good, conservative ideas percolating around Capitol Hill that could help jumpstart economic growth. At the same time, free traders should not paper over fundamental differences of opinion about trade policy with the president. A costly trade war could undo other pro-growth policies put in place.
In keeping with the demands of the Constitution, Congress should reassert its authority over trade matters while reining in the worst protectionist impulses of the executive branch.
Brandon Arnold is Executive Vice President of National Taxpayers Union. Clark Packard is Counsel and Government Affairs Manager of National Taxpayers Union.