Former President Donald Trump has continued to press his proposal to impose across-the-board tariffs of as much as 20% on imported products, but trade policy experts are divided whether he would have the legal authority to carry out his plan without action from Congress.
Economists and some leading farm groups are warning that his tariff plans, which include raising tariffs on China, could trigger trade wars that would backfire on U.S. farmers and consumers.
Tariffs are paid by importing companies, which then generally pass on the increase to consumers.
Alan Wm. Wolff, a distinguished visiting fellow at the Peterson Institute for International Economics and a former assistant U.S. Trade Representative, said he doesn’t think Trump has the authority to impose the across-the-board tariff that is central to his plans.
“There are various authorities, but no authority to put on just one blanket tariff, wholesale, in my view,” Wolff said in an interview with Agri-Pulse.
Alan Wm. WolffWolff, deputy director-general of the World Trade Organization from 2017 to 2021, also opined recently on the subject, saying that “many people appear to assume” that Trump could, on the first day of his new term, fulfill his campaign promise to impose 10% to 20% tariffs on all imports. “This, combined with his threatened 60% tariff on Chinese imports, would cost the typical American household more than $2,600 a year.” But Trump “doesn’t have the authority to do this,” Wolff said in a September web post. “Saying he would be a dictator for a day if reelected doesn’t make him one. Why not? Because the U.S. Constitution says very plainly that Congress, not the president, has the authority to impose tariffs.”
During his presidency, Trump acted on his own to set tariffs on steel and aluminum and specific tariffs on Chinese goods that resulted in retaliation, costing U.S. agricultural exports dearly.
Retaliatory tariffs on U.S. goods that resulted from Trump’s use of tariffs in 2018 “led to significant reduction in U.S. agricultural exports,” most notably China, the National Corn Growers Association and American Soybean Association said last week, citing an analysis they commissioned from World Agricultural Economic and Environmental Services. The study analyzed the impact on U.S. exports if China ended existing tariff waivers and imposed 60% tariffs on U.S. products in retaliation for the higher duties Trump is threatening.
“As a result of retaliatory tariffs from the onset in summer 2018 through the end of 2019, U.S. agricultural export losses exceeded $27 billion, with China accounting for about 95% of the value lost,” the groups said, citing the Economic Research Service.
A Congressional Research Service report notes that “for more than 80 years, Congress has delegated extensive tariff-setting authority to the president,” insulating Congress from domestic pressures and leading to an overall decline in global tariff rates.
“However, it has meant that the U.S. pursuit of a low-tariff, rules-based global trading system has been the product of executive discretion,” CRS said. “While Congress has set negotiating goals, it has relied on presidential leadership to achieve those goals.”
Wolff notes that Congress has the power under the Constitution to do “anything it wants” when it comes to tariffs. “It can put on a 100% blanket tariff tomorrow,” he said, but cannot delegate all of its authority to the president.
Congress has, however, given the president “slices of authority which can be read as reasonably broad,” including Section 301 of the 1974 Trade Act, which allows retaliatory tariffs, Wolff said.
But of that authority, Wolff said, “I don't think Congress ever had in mind that retaliation would be against a whole country.”
Although Wolff doesn’t believe a president has the authority to impose across-the-board tariffs, Section 232, or national security, authority, offers more leeway. That was what Trump used to impose steel and aluminum tariffs.
“I think anything Chinese would be easy to go after under one authority or another,” Wolff said, including invoking national security to restrict Chinese computer chips.
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“But how about something from the EU or the rest of the world? I think that would be hard for them to do,” he said.
Scott Lincicome, a vice president at the libertarian Cato Institute, says Trump could potentially make use of Section 338 of the Tariff Act of 1930, “which authorizes the president to impose tariffs of up to 50 percent on imports from countries that have ‘discriminated’ against U.S. commerce as compared to what another foreign nation does. To date, the short and ambiguous law has never been used, but it remains on the books and could therefore be ripe for abuse by a protectionist administration.”
Scott LincicomeCongress’s inability to act expeditiously on even the most critical pieces of legislation, such as appropriations bills, also supports the notion that presidents can act unilaterally on tariffs without having to worry about substantive pushback from Capitol Hill.
Republican and Democratic lawmakers “loudly complained about the Trump/Biden tariffs and even sponsored several pieces of reform legislation,” Lincicome wrote recently. “Yet Congress has taken a grand total of zero actions to actually move those or any other bills toward a floor vote.”
While that lack of action might indicate that Congress is actually more protectionist than lawmakers like to let on, Lincicome said “it more likely reflects a simple institutional reality that stymies any effort to limit any presidential power after Congress has delegated it.”
Erica York, senior economist and research director with the Tax Foundation’s Center for Federal Tax Policy, has little doubt a second Trump administration "would push the envelope to pursue their goal of higher tariffs,” She added, “We know from the economic data on the 2018-19 trade war that nearly the entire burden of the tariffs has been passed through to the U.S. economy.”
The Biden administration kept most of Trump’s tariffs in place; the Tax Foundation has estimated taxpayers will continue to see what amounts to $200-$300 tax increase if they are continued.
A former senior trade official in the Biden administration who spoke to Agri-Pulse said "it’s clear [Trump] wants to impose new tariffs, but it’s not very clear he is considering whether he has the legal authority to do what he wants." Ultimately, he said it may be up to the courts to decide the extent of his authority, "and that requires someone to file a lawsuit against a Donald Trump Administration."
"With respect to Congress potentially weighing in, it will just depend on what measure Trump imposes and what the rationale for it is," the former official said. "Certainly, tariffs have an important role in economic policy, but tariff policy needs to be shaped in a measured, thoughtful way to maximize the intended policy outcome and minimize any collateral damage."
Vice President and Democratic presidential candidate Kamala Harris has attacked Trump’s tariff proposals as a $4,000 tax on American consumers. (That estimate is on the high end of the progressive Center for American Progress’s range of $2,500-$3,900; other estimates are lower, such as the Peterson Institute’s $1,700.)
Harris has given no indication she will pursue different trade policies than President Joe Biden. The Democratic Party platform criticizes Trump’s tariff proposals as “extreme” but also notes approvingly that Biden “strategically” increased tariffs on products such as semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes and medical goods.
Wolff, however, thinks a Harris administration eventually would take a step back and say, “Let's look at what we've actually done here” when it comes to China, which potentially would lead to a “slow unwinding” of some of those tariffs now in place.
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