Reject U.S. Reciprocal Trade Act’s Presidential Power Grab

Note: Since I wrote this post, Rep. Sean Duffy (R-WI) has announced that he will sponsor the bill.

A forthcoming bill, the U.S. Reciprocal Trade Act, written by “Death by China” coauthor Peter Navarro and other presidential advisers, seeks to expand the president’s tariff-making powers. Its goal is to encourage Beijing to open China’s markets to U.S. producers. The White House is currently seeking cosponsors for the bill, and President Trump is expected to promote it during his upcoming State of the Union address.

Congress should reject the bill. President Trump already has the power to raise tariffs without congressional authorization. While only Congress has taxing power under the Constitution, it delegated some of that power away to the president in the 1962 and 1974. The specific provisions were unused for decades until last year, when President Trump used them to roughly double tariffs.

These are the powers President Trump invoked to enact the steel and aluminum tariffs, and levies on more than $200 billion worth of Chinese goods. Further actions are possible in the near future against foreign automobiles, as well as an increase on the China tariffs.

Congress should affirm the separation of powers by rejecting the U.S. Reciprocal Trade Act’s presidential power grab. It should also take back the tariff-making powers it already granted. President Trump’s tariffs have not only raised U.S. trade barriers, they have caused other countries to raise theirs. If the tariff’s strategy’s goal is to open markets for U.S. producers, it has failed.

The correct response to a policy failure is to change it, not double down on it. In this case, the Trump tariffs have already cost the U.S. nearly 1.8 percentage points of GDP growth, raised consumer prices, caused billions of dollars of economic losses, and thousands of layoffs. GM alone is laying off 14,700 workers.

That’s bad for everyone. As for members of Congress, the GOP brand currently owns the tariffs. Re-branding is not only sound policy, it is wise politics for Republican members fresh off a 40-seat loss in the House.

Politicians of all stripes are typically reluctant to go against a president from their own party. Rejecting the U.S. Reciprocal Trade Act is a way to stand up for sound policy as well as basic principles of American government, such as the separation of powers. Congress should do more than simply decline to give the president more of its taxing power. It should take back the power it has already given away. Several bills to do this were introduced in the previous Congress, though none passed.

With the economic and political lessons learned in the previous two years, reforms stand a better chance this time around. Either way, voters deserve to know how interested Congress is in leading, rather than following.

The U.S. Reciprocal Trade Act is not the only trade bill the White House would like to sign. Navarro and other White House advisers have also drafted legislation to pull the U.S. out of the World Trade Organization, though it has not yet been introduced. As a sign of the gravitas with which the White House is treating trade issues, it is called the FART Act.

For more on what Congress should be doing on trade, see chapter 2 of the Competitive Enterprise Institute’s new “Free to Prosper” agenda for the 116th Congress.

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