How to Stop Trump’s Trade War Madness
Congress has the authority to limit the president’s reckless endangerment of the economy.
The trade war between the United States and China spiraled out of control last week, with threats from the United States of yet more tariffs — this time on shoes, clothes and cellphones — and a hasty determination to name China a currency manipulator at least five years after it stopped doing so.
China responded by halting purchases of American farm products and accusing the United States of deliberately destroying the international order. The stock market plummeted, as fear grew that there was no limit on Trump’s willingness to recklessly endanger the American economy. But there is a limit — Congress. And unless Congress steps up, Mr. Trump will continue to flout the rules.
The Constitution gives Congress, not the president, the power to impose tariffs, or taxes on imports. Admittedly, Congress has handed over a good deal of that tariff-levying authority to the president over the years, but there are still important limits in place that Mr. Trump seems determined to ignore.
When imposing tariffs, for example, the usual practice is to give an economic justification. In April 2018, Mr. Trump’s trade representative, Robert Lighthizer, did just that when he announced an intention to impose tariffs on $50 billion in goods from China, declaring that amount to be equal to an expert assessment of the economic harm from China’s policies and practices. The rationale was set out in a well-documented report, as required by Section 301 of the Trade Act of 1974. But just two days later, without presenting further evidence, Mr. Trump threatened to subject $100 billion more in Chinese imports to a 25 percent tariff.
Two months later, he sought tariffs on $200 billion worth of more goods from China and, after that, threatened to impose tariffs on all Chinese imports. And lo and behold, that is where we may well end up on Sept. 1 — with tariffs on virtually every item imported from China.
Are there no limits on what the president can do?
The Trade Act of 1974, under which Mr. Trump’s initial tariffs were imposed, was intended to give the president wide power to enforce trade agreements and to respond to unreasonable foreign practices. But Section 301 of that law also provides for the imposition of tariffs to address a specific offending act or practice.
President Trump appears to be paying lip service, at best, to this requirement. When Trump administration officials traveled to Beijing for negotiations, the top item on their list of demands was that China buy more American goods, to reduce the size of the bilateral trade deficit. But the trade deficit was not listed among the “offending acts or policies” outlined for elimination by the tariffs. And when Mr. Trump declares (falsely) that China will pay for the tariffs or proclaims on Twitter that it’s O.K. if no deal is reached because the United States will gain billions in tariff revenue, he undermines any notion that tariffs are in place as leverage to address grievances.
Congress can take three steps to assert some control. The most fundamental is to change the laws that delegate wide tariff authority to the president: Section 301, as well as Section 232 of the 1962 Trade Expansion Act, the International Emergency Economic Powers Act and the Trading With the Enemy Act of 1917. Each of them should be changed to put limits on when, for how much and for how long the president can unilaterally impose tariffs.
There are also steps that Congress can take right now. It should insist on bringing our allies, including the European Union, Canada, Mexico and Japan, into our trade negotiations with China. Many of them have the same concerns about China’s trade practices, and could be asked to join a coalition of countries to challenge China at the World Trade Organization. It would be hard even for China to retaliate against so many countries at once.
Congress should also insist on regular briefings — starting now — on the goals for the negotiations with China. Is the primary goal the reduction of the bilateral trade deficit? Stopping the theft of intellectual property? Ending the forced transfer of technology? Is this all a ruse to force the American economy to be “decoupled” from China? Or is this just an excuse to build a tariff wall around the United States?
The mixed messages from the Trump administration have made it difficult to reach an agreement. But Congress can insist that the United States be clear about what a successful agreement with China would look like — one that addresses the true concerns about China’s trade practices in a manner that will have made all the pain and the chaos worth the price.
Jennifer Hillman (@J_A_Hillman), a senior fellow at the Council on Foreign Relations and a professor at Georgetown Law Center, is a former general counsel in the Office of the United States Trade Representative.
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