Grassley and his colleagues should restore oversight of tariff policy

Tariffs, like taxes, are paid by the American people. The difference is that Congress votes on taxes.

Although the Constitution grants the legislative branch the power “to regulate commerce with foreign nations,” over much of the past century Congress has delegated more and more authority over trade policy to the executive branch. While this has enabled multiple presidents to negotiate tariff reductions, which have greatly benefited the American people and increased our prosperity, with recent tariff increases as part of an ongoing trade war, it has also reduced accountability.

In response to the ongoing trade dispute, Congress might finally be getting back in the game. Senate Finance Committee Chairman Charles Grassley (R-Iowa) is drafting legislation designed to increase congressional accountability over tariff increases.

A strong economy, fueled in part by tax reform and regulatory relief for which the administration deserves great credit, has masked the impact of tariffs for many Americans. However, some are reeling from the adverse effects of higher tariffs and reduced access to markets. For them, relief cannot come soon enough.

In the succinct words of Tom Zimmerman, head of Michigan-based Spectrum Automation, U.S. tariff increases on steel and aluminum have “mucked up the works.”

When the tariffs were announced, “our main steel supplier sent out a notice of a 7 percent increase,” said Zimmerman, whose company makes parts-feeding and material-handling machines for automakers and other industries.

Overall, the metal tariffs increased the price of steel products by 9 percent last year, making everything from beer to boats to grills more expensive and forcing companies large and small to choose between raising prices, laying off workers, or absorbing the cost themselves (to the detriment of their owners and investors).

Sold as a sure path to bolstering U.S. manufacturing, instead we are seeing companies like U.S. Steel laying off hundreds of workers. In Grassley’s Iowa, Bettendorf-based Sivyer Steel Castings expects to cut 232 employees by the end of this year.

In the broader economy, the ripples are spreading.

According to a study published earlier this year by the National Bureau of Economic Research, the administration’s trade wars were costing our nation’s businesses and consumers $3 billion and nearly $1.5 billion in lost efficiency per month by the end of 2018.

Moody’s Analytics estimated that the trade war with China alone has eliminated 300,000 jobs and could wipe out up to 900,000 jobs by the end of next year.

Things could only get worse if tariff increases on China scheduled to take effect later this year go forward. And then there are the threatened auto tariffs which, if implemented, could put 100,000 American jobs at risk.

The steel and aluminum tariffs were imposed under questionable national security grounds under Section 232 of the Trade Expansion Act of 1962, despite there being no shortage of steel. According to the Department of Defense, the military needs only 3 percent of American steel and aluminum production to meet its requirements.

Grassley has said forthcoming legislation could include changes such as imposing a time limit on any trade restrictions levied by the president; requiring congressional approval for any restrictions to be extended; and mandating a transparent process for deciding which products or industries are granted exemptions from tariffs.

“It adds up to something pretty simple,” Grassley has said. “Congress has delegated too much authority to the president of the United States.”

He’s right. He’s also right to stress that the reforms are not aimed at the current occupant of the White House. “This is not about Trump. It’s about the balancing of power,” he said.

This would be an important first step to rebalancing the authority over tariffs and trade barriers that Congress has ceded to the executive branch. Any tariff imposed by a President should be approved by Congress, including actions taken under other sections of law.

It is critical that Congress reclaim its constitutional role in the tariff process to guard against unilateral actions that hurt the economy, and that threaten the checks and balances that define our system of government.

Tim Phillips is president of Americans for Prosperity.

Tags Charles Grassley China trade war section 232 Tariff
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