Trade and economic policy do not often lead to rich-world constitutional crises. But as President Donald Trump prepares to unveil tariffs set to be a historic milestone in the management of the US economy, it's worth pointing out he won't be doing it the way the republic's founding document envisions. As Trump's advisers finalize plans to impose another wave of duties including so-called "reciprocal" tariffs on all or most US imports, there's no sign that they have given the US Congress a substantive say. Or that Trump cares very much what Congress thinks as he gears up for April 2 and what he has dubbed "liberation day." And yet Article 1 of the US Constitution is clear in giving the legislative branch the power "to lay and collect Taxes, Duties, Imposts and Excises" and "to regulate commerce with foreign nations." In both his first term and his current one, Trump has invoked powers given to presidents via laws passed decades before to impose his tariffs. Those moves, though, haven't been without controversy and it's fair to say Trump is going a giant leap further in testing the boundaries this time. That's caused even Republicans to mull out loud whether the legislature should rein him in. "Tariffs really should be a congressionally initiated action," Republican Representative Don Bacon told CNN last week, citing the Constitution. Bacon also called past moves by Congress to delegate "temporary" tariff authorities to presidents a "mistake" and said "I think we should look back and maybe restore the power to Congress." Read More: Trump Open to Tariff Negotiations, Will Hit Drug Imports 'Soon' Of particular interest to legal scholars this time is Trump's use of the International Emergency Economic Powers Act to levy duties on Canada, Mexico and China. Trump in February became the first president to invoke IEEPA to justify tariffs. The only move like it is Richard Nixon's use of a predecessor of the 1977 law to impose duties that lasted four months in 1971 to force other countries into currency revaluations. But there's a convincing argument out there that IEEPA doesn't really grant presidents the power to impose tariffs and that Trump's use of the statute violates the Constitution. Court Challenges Which matters because there's a good chance IEEPA will feature again this week as a justification for Trump's new tariffs. At some point someone is likely to challenge the constitutionality of that maneuver and ask US courts to decide. Which means eventually the Supreme Court may rule on Trump's power to declare economic emergencies and levy tariffs. For that reason there's an expectation that if some of Trump's tariff actions this week use emergency powers so they can go into immediate effect, they may be accompanied by the launch of investigations under other laws that would eventually put duties on firmer legal footing. But all that is procedure and technicalities. Trump is already setting broader precedents that undermine Congress' constitutional trade powers. Read More: Anti-American Sentiment Rises in Europe as Trump Fuels Anger Until Trump won the 2016 election, presidents usually engaged Congress actively on trade. Mainly because most meaningful trade policy involved negotiating agreements with other countries that would eventually be voted on by Congress. There is even a formal process under which Congress votes to delegate some of its constitutional authority to presidents so they can haggle over trade with other countries. Trump used that power when he renegotiated NAFTA and rebranded it the USMCA, putting it to a formal vote in Congress and gaining bipartisan support. This time around, however, as he is on all sorts of issues, Trump appears intent on asserting unbridled presidential power over international commerce. Trade Deals That means ignoring commitments made in congressionally-ratified trade deals. The tariffs imposed on Canada and Mexico using IEEPA represent a pretty clear violation of the USMCA. As do the auto tariffs Trump announced last week, which seem likely to break a trade agreement with South Korea as well. In fact, you could make a case that pretty much any trade agreement signed by the US is in question these days. Read More: Charting the Global Economy for the Week Ahead If Trump proceeds with "reciprocal" tariffs under which a single duty will be applied to individual countries based on their perceived barriers, he will be abandoning decades of negotiations under what are now the rules of the World Trade Organization, membership of which was ratified by Congress. But Trump's expected actions this week also look a lot like the sort of sweeping package of duties and changes in policy that would have been debated – and voted on – in the legislature previously in US history. The infamous 1930 Smoot-Hawley tariffs were the result of congressional legislation. As were the 1890 McKinley tariffs that Trump has cited as an inspiration. Which is all to say that as Trump deploys his largest act of protectionism yet this week he won't just be testing the resilience of the US economy. He's also exploring the limits of his constitutional power. —Shawn Donnan in Washington Bloomberg's tariff tracker follows all the twists and turns of global trade wars. Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping. |
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