Bills
| 3.23.22

Should Congress Reassert its Authority Over Trade and Tariff Policy? (H.R. 1008)

Do you support or oppose this bill?

What is H.R. 1008?

(Updated March 12, 2020)

This bill — the Trade Security Act of 2019 — would reform the Section 232 statute to ensure that any Section 232 trade actions are based on national security determinations by the Dept. of Defense (DOD) and give Congress more power to reject tariffs levied under Section 232.

Specifically, this bill would:

  • Bifurcate the existing Section 232 process into an investigation phase, led by the DOD, and a remedy phase, led by the Dept. of Commerce so as to play to each agency’s strengths and ensure that the statute is used for genuine national security purposes.
  • Require the DOD – instead of the Dept.  of Commerce – to justify the national security basis for new tariffs under Section 232 and make the determination about the national security threat posed by imports of certain products. If a threat is found, the DOD would send its report to the president. When the president decides to take action based on the finding of a national security threat, they would direct the Secretary of Commerce, the Secretary of Defense, and the U.S. Trade Representative to develop recommendations for how to respond. After receiving the recommendations the president would decide whether to take action.
  • Increase the role of Congress in the Section 232 process by expanding the ability of Congress to reject a Section 232 action by passing a joint resolution of disapproval. Currently, Section 232 contains a disapproval resolution process limited only to the disapproval of actions on oil imports, which was inserted into Section 232 in 1980 by Congress in response to concerns about the misuse of the statute. This bill would expand the use of that disapproval resolution process to all types of products. The reformed disapproval process wouldn’t be available for retroactive use.

  • Require consultation with Congress throughout the Section 232 process.

Argument in favor

Congress needs to reassert its constitutional authority over U.S. trade and tariff policies and expand its oversight of the executive branch, particularly as it relates to tariffs imposed by President Trump on questionable national security grounds.

Argument opposed

The president has the power to impose tariffs due to national security concerns and there’s no need for Congress to interfere in how the executive branch carries out U.S. trade policy. Alternatively, it wouldn’t apply retroactively to Trump’s tariffs.

Impact

Trade; tariffs; DOD: Dept. of Commerce; Congress; and the president.

Cost of H.R. 1008

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Rep. Ron Kind (D-WI) introduced this bill to reassert Congressional authority over trade and tariff policy and redesignate national security threat assessments in regards to trade agreements to the Department of Defense:

“This Administration’s go-it-alone approach of resolving our trade imbalances has sparked a trade war that is hurting Wisconsin farmers, workers, and families. The National Security tariff process is being misused, at the cost of our rural and local economies. It is long-past time for Congress to reassert its constitutionally-granted power in our Nation’s trade policy and protect our export power.”

Rep. Jackie Walorski (R-ITN), an original cosponsor of this bill, adds that it’s needed to ensure that trade disagreements are handled appropriately:

“The president is right to seek a level playing field for American businesses and workers, but the best way to do that is with a scalpel, not an axe. Overly broad tariffs continue to harm manufacturers in my district and threaten our nation’s economic momentum, and it’s clear the national security tariff process is flawed. This bipartisan bill would restore fairness, transparency, and accountability to the Section 232 process, ensure these tariffs are only used when necessary to protect our national security, and give the American people a voice by strengthening congressional oversight.”

Americans for Prosperity calls this bill a “step in the right direction.” Its president, Tim Phillips, says:

“With each new tariff, American workers, businesses and consumers face what is essentially higher taxes that undermine economic expansion and job growth. The bipartisan Trade Security Act will allow Congress to provide a check on new tariffs. We support the efforts of Sen. Portman, Rep. Kind and other lawmakers from both parties pursuing legislation to provide congressional review and approval of tariff increases. Our ultimate goal should be the elimination of all protectionist policies. This legislation is a step in the right direction.”

The U.S. Chamber of Commerce, which also supports this bill, adds that previous applications of Section 232 tariffs have inflicted harm on U.S. allies and alliances:

"[T]his legislation would help restore the proper constitutional role of Congress in tariff policy by providing for Congressional disapproval of prospective tariffs designated under Section 232 of the Trade Expansion Act of 1962… Earlier application of Sec. 232 tariffs has inflicted substantial harm on U.S. industry and consumers in every state... The imposition of these tariffs on many of America’s closest allies — ostensibly in the name of national security — has also undermined U.S. efforts to build an international coalition of like-minded countries to combat the use of unfair trade practices.”

This bill has six bipartisan House cosponsors, including three Democrats and three Republicans. A Senate companion bill, sponsored by Sens. Rob Portman (R-OH), has eight bipartisan cosponsors, including five Republicans and three Democrats. It also has the support of Americans for Prosperity, the U.S. Chamber of Commerce, and Business Roundtable.


Of Note: The Trump administration has used tariffs liberally in an attempt to remedy the trade deficit. As of December 5, 2018, the Trump administration had imposed $42 billion worth of tariffs on thousands of products, and had threatened additional tariffs of up to $129 billion. The first $42 billion of tariffs were estimated to reduce after-tax incomes by 0.30 percent on average; and the effect was more pronounced for households in the middle and lowest quintiles, whose after-tax incomes were reduced by 0.33 percent. If the threatened tariffs were all imposed, after-tax income for households in the bottom and middle quintiles would fall an additional 1.04 percent, versus an average decrease of 0.92 percent.

As the Brookings Institution’s Eswar Prasad points out, “A trade deficit is not necessarily a bad thing because it means that consumers are consuming more and there is more investment happening in the economy.” Moreover, Prasad contends, there are ultimately no winners in trade wars, as they create “concerns for the economy” that reduce consumer and business confidence, leading to decreased consumption and investment in the economy.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / Kameleon007)