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One of the most infuriating aspects of President Donald Trump's trade war is the ease with which he started it.
There were no congressional hearings, no votes, and no meaningful oversight before the Trump administration imposed a 10 percent aluminum tariff and a 25 percent steel tariff on June 1, 2018. Those tariffs are now costing American businesses more than $500 million each month, according to one assessment, and the Congressional Budget Office reported this week that the tariffs are a measurable drag on economic growth. The cost of the tariffs has been passed along steel and aluminum supply chains, forcing businesses to charge higher prices, lower revenue goals, and layoff workers—all without doing much of anything to boost steel and aluminum manufacturing. America metal companies have seen stocks slide and hiring remains generally flat.
All that might—might—be enough to finally get Congress involved.
Sens. Pat Toomey (R–Pa.) and Mark Warner (D–Va.) announced Wednesday the introduction of the Bicameral Congressional Trade Authority Act, which would limit presidential authority to impose tariffs without congressional approval. It would also force the Trump administration to bring its steel and aluminum tariffs before Congress for retroactive approval, months after they were imposed. A similar bill will be introduced in the House by Reps. Mike Gallagher (R–Ind.) and Ron Kind (D–Wis.).
"The imposition of these taxes, under the false pretense of national security, is weakening our economy, threatening American jobs, and eroding our credibility with other nations," Toomey said in a statement. "Over recent decades, Congress has ceded its constitutional responsibility to establish tariffs to the executive branch. This measure reasserts Congress's responsibility in determining whether or not to impose national security based tariffs."
The bill takes aim at the underlying law that allowed Trump to unilaterally impose those steel and aluminum tariffs in the first place: the Trade Expansion Act of 1962. Section 232 of that law allows the president to impose tariffs for national security purposes without congressional approval. It may have seemed like a good idea at the time—in part because members of Congress have historically been more protectionist than residents of the White House—but Section 232 leaves the question of what counts as "national security" up to the president and his cabinent.
That loophole is so large that it's not even really accurate to describe it as a loophole. As Trump has demonstrated, the current language of Section 232 effectively gives the chief executive carte blanche to impose tariffs for purely political reasons. Sure, the Commerce Department had to cook up a report explaining why imported steel and aluminum were a national security threat. America needs sufficient steel- and aluminum-producing capability to manufacture weapons in the event of a major war, is one argument. But even the Pentagon has disputed part of that reasoning, and, anyway, if a war cuts off American imports of steel and aluminum from allies like Canada, we've got bigger problems than a lack of steel.
The bipartisan, bicameral proposal announced Wednesday would require Trump (and any future president) to submit potential Section 232 tariffs to Congress for approval, with the promise that Congress would review and vote on the tariff proposal within 60 days. It would also redefine the national security designation to include a narrower set of goods, including military equipment, energy supplies, and critical infrastructure. Finally, it would shift control over Section 232 designations from the Commerce Department to the Pentagon.
"These commonsense reforms would reduce the misuse of alleged national security threats for costly, protectionist ends," wrote a coalition of 38 trade and industry groups supporting the bill, led by free market organizations including the National Taxpayers Union and Americans for Prosperity, in a letter to members of Congress. The reforms included in the Toomey-Warner bill will "more appropriately balance power between the legislative and executive branches," the groups wrote.
While the bill would apply some retroactive oversight to Trump's steel and aluminum tariffs, it would also represent a significant defense against Trump's threats to use Section 232 to apply tariffs on imported cars and car parts. There's no realistic way to argue that imported cars are a threat to America's national security, but the White House instructed the Commerce Department last year to take the first step towards imposing those tariffs.
Due to the global nature of automotive supply chains, tariffs on imported cars and car parts would increase automobile prices by thousands of dollars—even for cars that are largely assembled in the United States. A study conducted by the Peterson Institute for International Economics (PIIE) found that a 25 percent tariff on automobiles would cause production in those industries to fall by about 1.5 percent and would force the industry to shed around 1.9 percent of its American workforce, nearly 200,000 jobs.
This isn't the first congressional effort at signaling disagreement with the White House's aggressive use of Section 232, but it seems like the most well organized and serious attempt to date. Last year, Toomey and then-Sens. Bob Corker (R–Tenn.) and Jeff Flake (R–Ariz.) sponsored a nonbinding resolution aimed at limiting the president's ability to abuse the Section 232 tariff authority. Although 88 senators backed that resolution, an actual Section 232 reform bill never made it to the Senate floor.
Separately, a federal lawsuit launched by a trade association representing steel importers is seeking to overturn Trump's steel tariffs on the grounds that Section 232 is unconstitutional because the law lacks any "intelligible principle" limiting the president's authority to impose tariffs on supposedly "national security" grounds.
That lawsuit may be the best chance to kill the tariffs, as the congressional effort likely faces an arduous path. There is little reason to believe Trump would sign a bill limiting his ability to carry out one of his signature policies. That means the bill realistically needs two-thirds support in both chambers to override a potential veto.
"We need to be tough on China's unfair and illegal trade practices. But we need to work with our allies to do it," Warner said in a statement. "President Trump has strained our relationships with key allies and partners by abusing the authority that Congress granted him and stretching the concept of 'national security' beyond credulity."
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