Congress Should Reassert its Authority on Tariffs
A handful of lawmakers have introduced measures that would give Congress a greater voice on tariffs, which are essentially a tax on the American people. Collectively, these bills represent what good tariff policy looks like — the president and the people’s representatives holding each other accountable and both having a say on an issue that affects nearly every American.
The bipartisan Bicameral Congressional Trade Authority Act (S.287), introduced by Sens. Pat Toomey (R-PA) and Mark Warner (D-VA), would require Congress to approve within 60 days executive branch actions that raise barriers to trade such as tariffs and import and export quotas. If Congress does not pass an approval resolution, these proposed trade actions would have no force or effect. Rep. Mike Gallagher (R-WI) and Rep. Ron Kind (D-WI) introduced the companion legislation (H.R.940) in the House.
National security is the purported basis for some tariffs in place, such as those on imported steel and aluminum. So, to better handle future determinations, the legislation would transfer responsibility for investigating the effects of imports on U.S. national security from the Department of Commerce to the Department of Defense.
Steel is not in short supply nor does steel present the same kind of security vulnerabilities as, say, Chinese microchips. According to DoD, only 3 percent of American steel and aluminum production is required for the military. Yet the Department of Commerce concluded that “present quantities and circumstance of steel imports are weakening our internal economy and threaten to impair the national security.” This bill would help bring greater accountability in the event of future national security investigations.
Rep. Warren Davidson (R-OH) introduced the Global Trade Accountability Act (H.R. 723) which, similarly, would increase Congress’ role over tariffs. This bill, however, would apply to all authority over trade barriers, not just for national security, and feature a similar vote to approve any new tariffs. The bill does allow tariffs for national security exceptions without a vote, but such an exception would last for only 90 days without an option for renewal.
These bills couldn’t come soon enough. The administration promised that its tariffs would address our competitors’ unfair practices. Instead, they’ve resulted in our trading partners moving to impose their own destructive tariffs in retaliation. The consequences: U.S. tariffs, including those on steel and aluminum, have led to higher prices for American businesses and families, while they and the retaliatory tariffs have led to job losses, disrupted supply chains and diminished opportunities for U.S. businesses to sell American-made products overseas.
Tariffs are, fundamentally, a tax. Like all taxes, they’re paid by consumers, either directly or when businesses pass on their higher costs.
On top of the higher duties already in place, the administration is considering even more tariffs – this time on auto imports. In addition, after a three-month delay and barring a major agreement between the two nations, U.S. levies on $200 billion in Chinese imports could still increase from 10 percent to 25 percent. Although this increase has been delayed twice, it may still happen if it isn’t taken off the table altogether. A recent study by Trade Partnership Worldwide, a firm that specializes on trade issues, showed that the increase to 25 percent could, in the next three years, cost an average family of four $2,294 and cause 2.1 million Americans to lose their jobs.
Starting in the 1930s, Congress gradually delegated more authority over trade to the president. During that same time period, the United States has been a global leader in reducing and eliminating tariffs through bilateral and multilateral trade agreements.
Granting the president greater trade authority to negotiate such agreements has helped increase opportunity for millions of Americans. However, this delegation has also enabled the administration to implement tariffs on dubious grounds that create barriers on the American people.
The Bicameral Congressional Trade Authority Act and the Global Trade Accountability Act would give Congress greater oversight over U.S. trade barriers and require formal approval of any tariffs that increase costs and undermine our economy. They will help ensure that tariff policy — which has profound implications for the American people — is formulated with greater accountability.
Nathan Nascimento is executive vice president of Freedom Partners Chamber of Commerce.
