- Not enactedThe President has not signed this bill
- The house has not voted
- The senate has not voted
Committee on FinanceIntroducedMay 2nd, 2019
- senate Committees
What is Senate Bill S. 1284?
Cost of Senate Bill S. 1284
In-Depth: Sen. Mike Lee (R-UT) reintroduced this bill from the 115th Congress to subject unilateral actions by the president to increase trade barriers to congressional approval:
“Congress has ceded far too much law making power to the Executive branch including the power to unilaterally raise tariffs. 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.”
Its House sponsor Rep. Warren Davidson (R-OH), adds:
“On trade, along with many other issues, Congress needs to work with President Trump to restore power to the American people. Today, I introduced the Global Trade Accountability Act, which seeks to: support the President’s Constitutional authority to negotiate trade deals, and restore Congressional responsibility for reinforcing, improving, and approving trade policy. Thankfully, President Trump has made fixing the broken trade deals a priority. American manufacturing is vital to our economy and security. Owning manufacturing companies, I experienced the harmful effects of bad trade policy firsthand. Congress needs to join the President to collaboratively address the substantial impact of trade policy on job creators, farmers, and consumers in Ohio and across the country.”
Americans for Tax Reform (ATR) supports this bill. In a letter to ATR’s members, ATR president Grover Norquist wrote:
“This legislation would reaffirm Congress’ authority by requiring all tariffs proposed by the Executive Branch to be approved by the legislature. Article II of the Constitution gives the President the power to negotiate international trade agreements, not implement tariffs. Over time, Congress has increasingly allowed the Executive Branch to establish and raise tariffs and restrict imports, under certain conditions. Tariffs are another form of tax on American citizens, and therefore should be voted on by Congress. Domestically, tariffs harm jobs and the economy. The prices of imported goods increase, and the cost falls on consumers. Internationally, a trade war could ensue as other countries retaliate with their own trade barriers. Free trade is critical to the American economy and is essential to guaranteeing a high standard of living for Americans. International trade directly affects millions of jobs across all 50 states. In 46 of the 50 states, trade-related jobs account for more than one-quarter of all jobs. In total, more than 1 in 5 jobs, or close to 41 million, are reliant on trade… Congress should reassert its authority with all who serve in the Executive Branch, today and in the future. Members of Congress can demonstrate their support for Congressional authority and their opposition to increased tariffs by co-sponsoring the Global Trade Accountability Act.”
Susan Aaronson, senior fellow at the Centre for International Governance Innovation, a Canadian think tank, observes that Trump’s tariffs have “led to further disruption in rural areas, higher costs, fewer jobs, more addiction, more hopelessness, and fueling of lies, that the other guy or woman is taking your job.” She adds that Trump uses tariffs indiscriminately and poorly:
“Trump has not delivered and does not know how to deliver — no strategy, a real enforceable outcome with China. Tariffs are his magic Swiss army knife that he can use against nations without asking for [C]ongresssional assent.”
Dan DiMicco, former chairman of Nucor (a major U.S. steel company) and a longtime China critic who served as a trade advisor to Trump during the 2016 election, claims that tariffs will have few negative impacts. He argues that the latest round of tariffs against China, announced in August 2019, will have “little or not impact on consumers, just as prior tariffs did not increase inflation.” In fact, DiMicco argued for higher tariffs to punish China for bad acts:
“The president should go further and increase these additional tariffs from 10% to 25% on these remaining Chinese imports. China has not agreed to stop stealing intellectual property. Instead it is getting more aggressive, likely encouraging North Korea’s missile test, failing to follow through on agricultural purchases, and not making clear commitments to return to where negotiations were in May. Enough is enough! Markets will be fine.”
This legislation has four Republican Senate cosponsors in the 116th Congress. Its House companion, sponsored by Rep. Warren Davidson (R-OH), has 11 House cosponsors, including 10 Republicans and one Independent. As of August 29, 2019, neither bill had received a committee vote. This legislation has the support of Americans for Tax Reform, Freedom Partners, and FreedomWorks.
Last Congress, this legislation had five Republican Senate cosponsors. Its House version had 23 House cosponsors, including 22 Republicans and one Independent. Neither bill received a committee vote last Congress.
Of Note: The Trump administration has used tariffs liberally in an attempt to remedy the trade deficit. President Trump’s trade war with China has roiled global markets, and his unilateral declarations — including a tweet ordering U.S. companies to find alternatives to China and start making their products in the U.S. — have caused widespread uncertainty about the global economy.
Due to the president’s behavior, the Dow Jones Industrial Average fell 600 points after Trump’s tweet ordering American companies to seek alternatives to China. After Trump said that China had called to “get back to the table” on negotiations,” the Dow recovered by almost 300 points on the Monday after the tweet. However, Vox’s Emily Stewart notes, the global implications of the U.S.-China trade war are “weighing on investors.” She writes:
“The longer this goes on, with no firm deal in sight, the likelier it becomes to affect business investments and corporate decision-making, or even to tip the US into a recession. There’s also not a lot going on elsewhere for traders to focus on, making market movements more prone to follow day-to-day headlines and therefore more volatile, especially in an environment of tariff-by-tweet.”
Craig Allen, president of the U.S.-China Business Council, expresses similar thoughts:
“This [trade war] has become a process without a clear objective and without a clear strategy and without a clear endpoint. And it's being played out in much worsening global economic circumstances. It is more uncertainty heaped upon already existing uncertainty."
In the context of China, 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.
China is also not the only target of Trump’s tariff threats. Key U.S. allies and important neighbors have also been threatened with tariffs during negotiations over various issues. During a dispute over border control in May 2019, Trump threatened to impose a 5% tariff on Mexican imports. That kicked off days of fear among businesses and politicians in both countries until Trump said an immigration deal had been reached and scaled back his threats.
In July 2019, Trump responded to a French plan to tax high-earning tech companies, such as Google and Facebook, that provide digital services within France with a threat to tariff French wines. In a tweet, he wrote:
“France just put a digital tax on our great American technology companies. If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on [French President Emmanuel] Macron’s foolishness shortly. I’ve always said American wine is better than French wine!”
Before leaving for the G7 meetings, Trump reiterated his tariff threat, tweeting, “Those are great American companies, and frankly I don’t want France going out and taxing our companies. And if they do that ... we’ll be taxing their wine like they’ve never seen before.”
This prompted the European Council’s president, Donald Tusk, to say that the EU would “respond in kind” to such an action. Tusk said, “I will protect French wine with genuine determination for many reasons. The EU stands by France.”
- Sponsoring Sen. Mike Lee (R-UT) Press Release
- House Sponsor Rep. Warren Davidson (R-OH) Press Release
- Americans for Tax Reform (AFR) Letter (In Favor)
- Freedom Partners (In Favor)
- FreedomWorks (In Favor)
- The New York Times (Context)
- South China Morning Post (Context)
Summary by Lorelei Yang
(Photo Credit: iStockphoto.com / jimfeng)