Tariff Power
Philip Wallach at AEI: The Congress of a new generation doubled down on presidential leadership with the Trade Expansion Act of 1962, which also contained Section 232, allowing for tariffs implemented for national security reasons. At the urging of President Richard Nixon, Congress gave the president yet greater powers with the Trade Act of 1974, which created a “fast track” procedure for Congress to consider trade agreements negotiated by the president. Section 301 of that act gave the president the ability to impose new tariffs when a foreign nation’s trade practices were deemed “unreasonable or discriminatory.”
With these two provisions in place, U.S. presidents had tools capable of quickly imposing a broad protectionist program. But while Ronald Reagan and George H.W. Bush both engaged in some targeted protectionism, it wasn’t until the first presidency of Donald Trump that these powers were employed to their fullest, with Section 232 used to launch steel and aluminum tariffs and Section 301 used to impose a panoply of tariffs on China. The Biden administration largely left those actions intact.
While the second Trump administration’s actions of the last few weeks thus build on a long record of presidential leadership, they nevertheless represent a new chapter—in part because they have an entirely novel legal basis. Trump has claimed the authority to rewrite tariff schedules because America’s trade deficit represents an “emergency” for the nation. This unlocks presidential powers under the International Economic Emergency Powers Act (IEEPA), a law heretofore used as the basis for economic sanctions but not for making trade policy, or so the theory goes. Trump has made it clear that the nature of this emergency requires the president to act as dealmaker-in-chief, which means he must be able to threaten, adjust, and readjust at the drop of a hat if he is to get the best deal for the American people and end our decades-long trade peonage.
