Despite promising a bold protectionist agenda on the campaign trail, other than withdrawing the United States from the Trans-Pacific Partnership, President Trump’s first year in office was fairly conventional on the trade front. The 2018 agenda, however, has been markedly different and significantly worse.
Given that most Republicans in Congress have views on trade policy that diverge widely from the president’s, Congress should reassert its constitutional role in setting the trade agenda.
In January, the president levied discretionary tariffs on imported solar products and washing machines, under authority granted to him pursuant to Section 201 of the Trade Act of 1974. It was a classic tale of crony capitalism, in which troubled domestic businesses turn to the government for protection from foreign competition. Section 201 tariffs, known as “safeguards,” were criticized by a few members of Congress, most notably from the South Carolina and Tennessee delegations. Though discretionary, the tariffs will phase out over time. They will do significant harm to domestic companies and consumers of solar and washing machine products, but safeguards are within broadly accepted rules of international trade.
Now the White House has turned its attention to allegedly unfair intellectual property practices by China, with plans to levy approximately $60 billion annually in tariffs on Chinese imports. Unlike the other cases in which the president has levied tariffs this year, some of China’s practices are worthy of addressing, especially industrial espionage and the theft of trade secrets.
But instead of performing an investigation and building a coalition of partners like Japan and the European Union, willing to confront China at the World Trade Organization, the administration is reportedly going to levy tariffs unilaterally under either Section 301 of the Trade Act of 1974 or under the International Economic Emergency Powers Act. This is a grave mistake and it remains to be seen how Congress will respond.
The president also is threatening to withdraw from the North American Free Trade Agreement and the U.S.-South Korea Free Trade Agreement if significant revamps of the deals cannot be reached. The president has even threatened to withdraw the United States from the WTO, joining the likes of North Korea and Somalia. It is unclear how much power the president has to withdraw the United States from these agreements unilaterally. Congressional leaders and the chairmen of the relevant committees have expressed strong opposition to these ideas, but thus far refused to stop them.
Congress has ceded much of its trade policy authority to the executive branch since the 1930s, after the disastrous Smoot-Hawley tariffs. The assumption was that the executive branch would be less prone to geographical parochialism than Congress. In some contexts this makes sense; it is much easier to have the executive branch negotiate trade agreements than 535 individual members of Congress. For roughly 80 years, this delicate balance worked, but no longer. Given that Trump has the most protectionist impulses since Herbert Hoover, Congress needs to step in and reassert its constitutional authority to levy tariffs and generally set trade policy.
One way for Congress to reassert its authority over trade policy is to pass the Global Trade Accountability Act, sponsored by Sen. Mike Lee, R-Utah. The companion bill was introduced in the House by Rep. Warren Davidson, R-Ohio. This legislation would require congressional approval of executive branch trade measures that raised tariffs, restricted imports, or attempted to withdraw from various trade agreements. The longer Congress waits to slow down the protectionist train, the harder the president’s ill-conceived decisions will be to overturn.
Even if the president vetoed Lee’s bill or another congressional attempt to curtail the executive branch’s trade policies, this is a fight worth having. It sends an unmistakable message to the White House that Congress will not be complicit with a damaging protectionist agenda.
Protectionism has an ugly history, and Congress knows that. With rising trade tensions, averting a global economic catastrophe needs to be the highest priority on the congressional agenda right now. History will more fondly remember those who stood up to the president’s protectionism than those who fiddled while Rome burns.
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