Trump tariff turmoil will continue unless Congress steps in

After days of mayhem, it counted as a relief: On Wednesday, the White House announced a 90-day reprieve for most countries from its severe new tariff schedule. Markets briefly rallied, the administration declared victory ... and then the chaos resumed. However this experiment is resolved, one lesson bears repeating: If Congress wants to avoid similar disarray in the future, it needs to reclaim its authority over tariffs from the executive branch.

Fortunately, sense seems to be prevailing in some corners of Capitol Hill. Among other efforts, a bipartisan bill circulating in the Senate this week — with seven Republican cosponsors — would require lawmakers to approve any tariffs proposed by the president within 60 days and allow them to cancel imposed duties at any time. A similar measure in the House also has bipartisan support, though it would face procedural hurdles.

Also Read: China to further raise tariffs on US goods to 125% from 84% as trade war continues


None of these bills is likely to pass soon. On the merits, though, they’re overdue. Although Congress is constitutionally empowered to set tariff policy, it has gradually ceded this prerogative on the theory that presidents would be better at expanding free trade than would parochial-minded lawmakers. That bargain worked for decades, helping to make the US a much more open, innovative and prosperous economy.

Unfortunately, the current administration has blown it up. After it imposed a slew of new tariffs this week — including a 10% “baseline,” a steep additional levy on China and ill-defined “reciprocal” tariffs on dozens of other countries — markets plummeted and Treasury yields rose sharply. Economists at Goldman Sachs Group Inc. initially put the probability of a recession over the next year at 45%.

The announced pause will help to an extent, yet the situation is still grave. The baseline rate will remain, as will the duties on China. Nearly every American trading partner will, evidently, be expected to negotiate entirely new rules over just three months, on pain of yet more disruption. Perhaps the administration will change its mind again in the interim.

It’s safe to say that Congress did not envision a president unilaterally reordering world trade — distorting markets erratically, to the detriment of nearly every American — when it delegated its tariff-setting powers. (A court challenge to that effect is underway.) Yet reclaiming its authority will be difficult. The president has already vowed to veto the Senate bill, and lawmakers are unlikely to find the votes needed to override him.

The effort could prove consequential all the same. Remember that only one elected official in Washington appears to support these tariffs unreservedly. (“I don’t quite understand the strategy,” said Republican Senator Ron Johnson, diplomatically, “and I’m not sure anybody else does.”) Should the president’s popularity continue to tumble over the coming months, and the costs to consumers and businesses continue to mount, more Republicans will have an incentive to register dissent, especially if their party keeps underperforming electorally.

They should stress that the president’s fitful trade policy could well jeopardize the rest of his agenda, including his tax-cut extensions and an energy and immigration bill. A concerted effort to take control of tariff policy if the White House fails to see reason should help concentrate minds. As one Republican representative put it: “I want that bill sitting there.”

With this brief respite, lawmakers have a chance to pressure the president to start making deals, mitigating the damage and bringing this heedless experiment to an end. They should seize it while they can.

(Disclaimer: The facts and opinions expressed here do not reflect the views of www.economictimes.com.)