Why Congress, not the WTO, is best suited to rein in Trump on tariffs | News | DW | 09.03.2018
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Why Congress, not the WTO, is best suited to rein in Trump on tariffs

President Trump has unilaterally imposed tariffs on aluminum and steel. But Congress could curb his authority to do so if it was ready to risk an all-out confrontation with him.

Why can Trump unilaterally impose tariffs?

The short answer is that it's because Congress granted him and other presidents before him the power to do so decades ago. That was done, ironically, because legislators with their more regional outlook were traditionally seen to harbor more protectionist tendencies than the president, who was deemed to have a broader, more national perspective. Originally, the US constitution granted Congress the power to impose tariffs.

So can Congress revoke that right?

Absolutely, said Phil Levy, a former senior economist on President George W. Bush's Council of Economic Advisers. "There is no doubt that Congress has the power. Congress passed the law, they can repeal the law or they can amend the law," Levy, now a senior fellow on the global economy at the Chicago Council on Global Affairs, said. The question is whether they would be willing to do that as it would be an unprecedented move and an open challenge to the president, who has veto power. Congress can still override veto with a two-thirds majority.

Read more: China dismay as Trump signs off steel, aluminum tariffs

So, while it would be highly unusual for Congress to do this, using an arcane national security provision to impose broad tariffs is equally unusual, said Emily Blanchard, a global trade scholar at Dartmouth College's Tuck School of Business. "We are out of the realm of the ordinary. The question is how extraordinary does it need to be before Congress does something to counter."

Congress would not necessarily even have to craft new legislation to curb Trump's tariff authority. It could instead just take up legislation introduced by Mike Lee, a tea party Republican from Utah, on Trump's inauguration.

"Congress has ceded far too much law making power to the Executive branch including the power to unilaterally raise tariffs," said Lee in a press release on January 20, 2017. "Sudden hikes in trade barriers could wreak havoc on many small and midsize manufacturers in my home state of Utah that rely on imports and globally connected supply chains. Congress must be involved in any decision that would increase barriers to trade."

US and EU flags separated by customs sign

Europe warned Trump that his tariffs could ignite a trade war

Lee's aptly titled Global Trade Accountability Act would force President Trump "to secure a joint resolution approved by both houses of Congress before any "unilateral trade action could take effect," according to Lee. Exemptions would be made for a limited time for national emergency situations.

Can't the World Trade Organisation (WTO) thwart Trump's tariffs?

Appealing to the WTO would be the most likely option for many countries. But such an appeal could not only take years to play out but may be unlikely to remedy the situation. Even worse, said Levy, "the Trump administration is laying an explosive trap for the World Trade Organization where they are going to be caught either way to go."

Read more: Trump forges ahead with new tariffs, offers exemption

They can refuse to throw Trump's tariff out, based on the argument that they can't weigh in on US national security issues. In this case, said Levy, they would create a huge loophole that other countries would use as well. Or they can throw the tariffs out, in which the US would very likely not accept that ruling as it would be perceived as allowing an international organization to determine what is or what isn't in US' national security interests.

Both, would be deeply problematic said Blanchard. "This is kind of a Pandora's box."

"If national security defined to include economic security becomes an accepted reason for imposing tariffs, then we have kind of blown the lid of the agreement we have under the WTO. Because it is so subjective, every country with a politically sensitive industry will say, 'it's our national economic security,' which should mean we should be able to protect our dairy industry or our lumber industry or fill in the blank with your favorite, local politically sensitive industry." 

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