How Trump can impose tariffs without Congress
Story by Sareen Habeshian, Axios, 11/15/24
President-elect Trump has vowed to impose sweeping tariffs with or without the support of Congress.
The big picture: While setting tariffs is a power typically afforded to Congress, the executive branch can also do so without congressional approval under special circumstances like over economic emergencies and national security issues.
Zoom in: The constitutional authority to tax is mostly given to Congress. But there are three exceptions particularly pertinent that the Trump administration may try to draw from, said Kimberly Clausing, professor of tax law and policy at UCLA School of Law.
- Section 232 of the Trade Expansion Act of 1962 gives the president the power to adjust imports that are deemed to threaten national security.
- Section 301 of the Trade Act of 1974 allows the president to take appropriate action, including tariff-based, to address any unfair act, policy, or practice of a foreign government burdening U.S. commerce.
- The International Emergency Economic Powers Act (IEEPA) authorizes the president to regulate international commerce and economic transactions during a national emergency.
What they’re saying; “These three give the executive branch authority to put on tariffs if they think there’s big national security issues, if there are national emergencies, or if they think unfair trade practices have happened abroad,” Clausing said.
- Those laws will likely be the ones Trump leans on, said Clausing, who served as the lead economist in the Office of Tax Policy in Biden’s Treasury Department.
Between the lines: It will be up to Congress, which is now dominated by Republicans, to determine whether or not to push back against Trump on the limits of these three exceptions.
- For the China tariffs, there’s probably ample authority, Clausing said.
- For Trump’s plan to impose across-the-board tariffs, however, Clausing said she thinks “most trade scholars would be somewhat uncomfortable with assigning to either of those three exceptions.”
- Clausing added: “But that doesn’t mean he won’t get away with it because Congress will have bigger fish to fry, or maybe implicitly, [they] just don’t want to get in his way on this particular issue since it’s so near and dear to the Trumpian policy agenda.”
Context: While the Constitution empowers Congress to set tariffs, the legislative branch has in part delegated that power to the president as tariffs have become less a revenue source than an instrument of foreign policy.
- Before the 1930s, Congress typically set tariff rates itself.
- But as both U.S. and global tariff rates increased during the Great Depression, U.S. exports decreased and so Congress authorized the president to negotiate trade agreements that reduced tariffs.