16 July 2018
Congress Signals Interest in Re-asserting Trade Policy Authority
The U.S. Constitution gives extensive authority to the U.S. Congress to set tariffs. That is why in recent trade negotiations Congress has had to delegate that authority to the president in order to allow trade negotiators from the administration to negotiate with their counterparts from other countries. This delegation of authority is called “fast-track” or “trade promotion” authority because it specifies that legislation presented by the president to Congress must be subject to an up-or-down vote without the possibility of amendments.
Traditionally, fast-track or trade promotion authority has required the executive branch to consult with congressional committees to keep them informed, but the actual trade negotiations – such as the various bi-lateral and regional free trade agreements negotiated by the United States – were carried out by the administration, not Congress. Trade negotiators do not see any way to make binding commitments unless fast-track authority is in place at the time an agreement is submitted for congressional passage.
However, a growing number of U.S. lawmakers are concerned that the administration’s recent actions on trade could have a destabilising effect on the U.S. economy. On 11 July, the Senate overwhelmingly (by a 88-to-11 vote) passed a non-binding resolution expressing the sense of the Senate that Congress should have a role in “making a determination under Section 232.” Section 232 is the authority (citing national defence concerns) used to establish tariffs on imports of steel and aluminium from all countries except those specifically exempted. The recent tariffs focused on mainland Chinese goods were issued based on a different statutory provision, Section 301, so they would not be affected by this action.
Sen. Bob Corker (Republican-Tennessee), who introduced the aforementioned non-binding resolution, last month spoke in favour of a binding amendment to “must-pass” funding legislation that would have forced congressional authorisation to be given before Section 232 tariffs could be imposed, but that amendment was not adopted. While the current resolution has no legal effect, it expresses a sense that the Senate should be involved in this decision-making process. Eleven Republicans opposed the resolution but a clear majority of Republicans joined the Democrats who voted to support it.
On 11 July in the House of Representatives, the Ways and Means Trade Subcommittee announced a hearing on the Section 232 and Section 301 tariffs to take place during the week of 16 July. Moreover, a bi-partisan group of six House members introduced potentially binding legislation similar to Sen. Corker’s bill, focused again only on Section 232 and not Section 301. Both houses of Congress now have many members of both parties who are concerned about the direction of the Trump administration’s trade policy but thus far no binding actions have been taken that would actually limit the imposition of additional tariffs by the administration.