Steel and Aluminum Tariffs: A Push and Pull between the President and Congress
September 7, 2018
President Trump’s decision to impose steel and aluminum tariffs and his threat to put tariffs on automobiles and parts under Section 232 of the Trade Expansion Act of 1962 have generated anxiety on Capitol Hill. Lawmakers have expressed concern about the economic impact of the tariffs as well as the legal foundation for them. The tariffs have harmed U.S. companies that rely on foreign steel and aluminum products not made in the United States. The metal tariffs have also led to retaliation from major U.S. trading partners. Canada has put tariffs on over $12 billion of U.S. imports. Mexico, China, and the European Union have imposed their own tariffs on roughly $3 billion of U.S. imports each. To escape the tariffs, Argentina, Brazil, and South Korea have agreed to quotas to cap their steel exports to the United States at a level below their recent annual export levels. Argentina has also agreed to an aluminum export quota. Quota arrangements with Canada and Mexico could be announced alongside a final NAFTA deal, which could come by the end of the month.
Members of Congress have also voiced unease about the president’s use of national security to justify tariffs on imports from the closest U.S. allies, some of which are NATO members. Staring down economic disruption and the president potentially overstepping his use of congressionally delegated power, some lawmakers have introduced legislation to check the president’s trade authority.
Q1: What legislation has been introduced on Capitol Hill?
A1: There are at least seven pieces of legislation—not counting companion bills—that have been introduced to check, modify, or undo the president’s authority to impose tariffs using congressionally delegated trade authority.
Here’s a brief rundown of some of them:
- S. 117, the Global Trade Accountability Act, introduced by Senator Mike Lee (R-UT) in January 2017. The bill generally requires congressional approval of unilateral trade actions taken by the president.
- S. 3013, a bill introduced by Senator Bob Corker (R-TN) in June 2018. The bill would amend the Trade Expansion Act of 1962 to require congressional approval before the president adjusts imports that are determined to threaten or impair national security. It would also allow Congress to vote to eliminate the Section 232 tariffs on steel and aluminum that President Trump imposed earlier this year.
- S. 3329, the Trade Security Act, introduced in August by Senator and former U.S. Trade Representative for President George W. Bush, Rob Portman (R-OH). The bill would amend Section 232 of the Trade Expansion Act of 1962 to allow congressional disapproval of 232 tariffs on any imports. The current 232 statute allows Congress to issue disapprovals and overturn Section 232 tariffs only on petroleum or petroleum product imports. The expanded disapproval jurisdiction would not apply to the steel and aluminum tariffs already in place. The bill would also require the secretary of defense to initiate investigations instead of the Commerce Department but leaves remedy analysis and prescriptions in the hands of the Commerce Department.
- H.R. 5760, the Trade Authority Protection Act, introduced in May by Representative Ron Kind (D-WI), would allow Congress to nullify actions via a joint resolution of disapproval using the same procedures as laid out in the Congressional Review Act. It would also require the president to submit a report to Congress on any action taken under congressionally delegated trade authority prior to the action being taken. That report must include an economic analysis of the action, an assessment of potential retaliation, and a list of articles that will be affected by the action.
- S. 3266, the Automotive Jobs Act, introduced in July by Senator Doug Jones (D-AL), would direct U.S. International Trade Commission (USITC) to report on the status of the U.S. auto industry and suspend the Commerce Department’s Section 232 investigation into the national security implication of importing automobiles and parts until the USITC submits its report and the president then determines whether to reopen the investigation.
- S. 3230, introduced in July by Senator Michael Bennet (D-CO), would undo the Section 232 steel and aluminum tariffs imposed on Canada, Mexico, and the European Union. The bill would otherwise not change Section 232.
Q2: What are the key differences among the bills?
A2: While all of legislation is aimed at checking the president’s use of Section 232 tariffs and most contain additional reporting or consultation requirements from the administration, there are some important distinctions among the bills. A few bills would require Congress to approve or disapprove tariffs ordered by the president by vote, while others would give Congress the chance to undo them after they’ve been imposed. Senator Lee’s bill would be the most restrictive on the president’s trade authority by requiring congressional approval of any trade action taken by the president. Senator Corker’s bill would give Congress the final say over tariffs the president intends to impose under Section 232.
Other legislation doesn’t go as far as allowing Congress to block tariffs but would allow lawmakers to undo them once imposed by the president. Representative Kind’s bill would allow Congress to undo any 232 tariffs, while Senator Portman’s bill would allow lawmakers to vote to undo 232 tariffs except for the steel and aluminum duties already in place. Senator Bennet’s bill would simply rollback the steel and aluminum tariffs. Senator Jones’ bill is the least restrictive. It does not expand Congress’ authority to block rollback 232 tariffs. Instead it merely freezes the 232 investigation into auto imports until the USITC releases a report on the status of the industry and the president decides to resume it.
Q3: What are their chances of passage?
A3: Dim, for a variety of reasons. The president has personally lobbied members of Congress against restricting his Section 232 tariff authority, arguing that doing so would hamstring his leverage in trade negotiations. With the midterms coming up, Republican leadership is wary of bucking the president on an issue that played well with his base in the 2016 election. Even if legislation found its way to the floor of either the House or Senate, it is difficult to imagine that it would garner enough votes to overcome a presidential veto. The Senate did take a tiny jab at the president over the steel and aluminum tariffs in July when it adopted 88-11, a non-binding and largely symbolic motion to give Congress a role in the president’s decisions to implement national security tariffs.
But a decision to use Section 232 to impose tariffs on imports of automobiles and parts could boost the appetite of Congress to pass binding legislation to rein in the president’s authority under the statute. The economic impact of those tariffs and likely retaliation to them would dwarf that of the steel and aluminum tariffs. The entire auto industry is united against the tariffs, and the sector has a foothold in essentially every congressional district.
Q4: Is it a good idea for Congress to take back trade authority from the president?
A4: Perhaps it is at the moment, given the course the Trump administration has taken. But in the long run, returning too much authority to Congress to set tariffs and U.S. trade policy could be disastrous. Congress has been responsible for the highest tariffs in U.S. history. From the early days of the first U.S. Congress to the Smoot-Hawley tariffs that contributed to the Great Depression, tariffs set by Congress have always been high, in part as the result of logrolling—tradeoffs where one member would support another’s proposed high tariff in return for the latter’s support for their own high tariff, both to protect industries in their states or districts. Congress, responsive to its local companies and workers, is much less insulated from local political pressures than the president. Since the 1930s, this has translated into the president adopting a policy of trade liberalization aimed at increasing the overall national good, while Congress, which set tariffs until the Reciprocal Trade Act of 1934 was enacted, pursued a trade policy that relied more heavily on tariffs to protect its constituents. Returning to the days of Congressional control over tariffs could mean returning to the days of Smoot-Hawley.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Jack Caporal is an associate fellow with the CSIS Scholl Chair in International Business.
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