Policy Studies Finance and Trade

Restraining the president: Congress and trade policy

by Clark Packard AND Philip Wallach

Nov 13, 2018

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Authors

Clark Packard

Former Trade Policy Counsel, Finance Insurance & Trade

Philip Wallach

Former Resident Senior Fellow, Governance

Key Points

Shortly after the disastrous Smoot-Hawley tariffs were passed in the early 1930s, Congress began delegating enormous trade policy authority to the executive branch. Today, Congress is a bit player in setting trade policy. While this arrangement worked for nearly 90 years as presidents of both parties worked to open foreign markets and lower its own trade barriers, it’s now being turned on its head.

Congress has complained about President Trump’s aggressive protectionist policies, but they have failed to move meaningful legislation to curtail his powers and overturn his actions.

The paper offers concrete ways for Congress to restrain the president’s agenda in a balanced way — one that wouldn’t recreate the institutional dynamics that led to the Smoot-Hawley tariffs but would restore some of the authority granted to Congress by Article 1 of the United States Constitution.

Press Release

How to restrain the President: Congress and trade policy

Introduction

The first sentence of Article 1, Section 8 of the United States Constitution gives Congress the power to “lay and collect taxes, duties, imposts and excises.” Controlling the terms of international trade is therefore unambiguously Congress’s responsibility. Today, however, by its own design and through the actions of many decades, the legislative branch has made itself a marginal player in trade—a body that complains about the president’s actions without actually making any effort to override them, as is their constitutional right.

Since the 1930s, Congress has delegated much of its Article 1 authority over trade policy to the executive branch. The assumption has been that Congress is too prone to geographical parochialism and too easily captured by rent-seeking lobbies that benefit from protectionism, while the executive branch takes a more holistic view of the economy. For roughly 90 years, then, the prevailing balance of power produced a bipartisan policy trajectory in favor of broad trade liberalization.

Read the full study here.