THE NUMBERS: Tariff collection 2018-2024 –
Congressionally authorized “MFN” tariff system: $216 billion
Administratively created “301” and “232” tariffs: $249 billion
The 2024 election’s core questions are more basic than policy choices. Such as: Can a person who has attempted to overthrow a settled election, and called for “termination” of unspecified parts of the Constitution, take and keep an oath to ‘faithfully execute the office of President of the United States’ and ‘preserve, protect, and defend the Constitution’? With this in the background, here’s the person in question talking about Congress and his tariff plan (10%, or 20% tariff on all products, and a 60% tariff on Chinese-produced goods):
“I don’t need them. I don’t need Congress, but they’ll approve it. I’ll have the right to impose them myself if they don’t.”
Such ideas would have big daily-life impacts. (How would a 20% tax on the $300 billion in U.S. energy imports affect heating and gas bills? on the $139 billion worth of auto parts bought by factories and repair shops? on family budgets for over-the-counter medicines, clothes, and groceries?) The insistence on going without Congress, though, raises a more basic and abstract question of governance: who should be able to impose a tax?
The Constitution gives a pretty clear answer. Its four sentences on trade policy all come from “Article II” (on Congress), with two from Section 8’s “enumerated powers” list, and two from Section 9’ “denied powers” list. The first (see below for the others) says flatly that “The Congress shall have Power to lay and collect Taxes, Duties, Imposts, and Excises.”
Giving Congress this power wasn’t a big Constitutional-drafting controversy. The “taxes, duties, imposts, and excises” clause, in fact, appears to have survived untouched from the first draft presented to the Constitutional Convention on August 6, 1787, to its publication on September 19th. James Madison’s notes of the August 16 session (the day the Convention debated import and export taxes) report none of that day’s 15 speakers arguing that a president should be able to set tariff (or other tax) rates. Why not? A single individual given power to set tax rates could use them to reward self and friends, punish critics, impoverish political or business rivals, etc.. A big Congress with lots of mutually suspicious factions might not find this impossible, but would have much more trouble agreeing to do it.
This pristine separation-of-powers approach thinned over time for practical reasons, as 19th-century case law (Brig Aurora in 1813, Field v. Clark in 1892) and 20th-century trade bills alloyed it with several forms of “delegation.” “Trade remedy laws,” for example, authorize tariffs in cases of ‘dumping’ and subsidies; “trade promotion authority” bills set out content and implementation rules for free trade agreements and similar ‘liberalizing’ policies, after giving detailed descriptions of when Congress would like Presidents to do these things. Whatever one’s opinion of the merits of trade remedy laws and trade agreements, “delegation” in these cases seems clearly a convenience in which Congress defines policy and asks presidents to execute it without the need for a new law, and courts have decided this is reasonable.
Three or four other laws, though, may have inadvertently provided presidents with something closer to genuinely arbitrary power. “Section 232” and “Section 301” of the U.S. trade law code give presidents rights to impose tariffs by themselves, respectively, as a negotiating tactic to eliminate “policies and practices” burdening U.S. commerce, and as a way to defend expansively described national security interests. The first Trump administration used “232” to raise tariffs on steel and aluminum, and “301” to do this for most Chinese-made goods. As a practical matter, this roughly doubled the size of the tariff system, with the new administratively created tariffs yielding slightly more than twice as much tax revenue as the Congressionally legislated “MFN” tariff system. Two other laws, “Section 338” and the International Emergency Economic Powers Act, have comparable “president says there is an emergency” approaches.
None of these laws, of course, envisions a president deliberately bypassing Congress to create a new tax system “by myself.” So there’s room to wonder about whether courts would strike down an attempt to try. If they didn’t — see below for two speculative, but legally-well-informed, short essays on different sides of this question) — the talk of “terminating” at least one important part of the Constitution wouldn’t seem idle.
From the National Archives, the Constitution transcript.
Madison’s notes on the August 16, 1787, debate on tariffs and export tax powers.
The Federalist Papers (see #30-#36 for taxation).
Congress explains each clause.
And Customs and Border Protection reports collection of administratively imposed “301” and “232” tariffs.
For the record, here are the Constitution’s four trade policy sentences. All are “Article II”, on Congressional organization and powers, with two in Section 8’s “enumerated powers” list, and two in Section 9’s “denied powers”:
Section 8: “The Congress shall have Power to lay and collect Taxes, Duties, Imposts, and Excises” and [power] “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”
Section 9: “No Tax or Duty shall be laid on Articles exported from any State” and “No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one State be obliged to enter, clear, or pay Duties in another.”
What if somebody tried?
Do current trade laws abandon or override the “Taxes, Duties, Imposts, and Excises” clause? Two informed views –
Alan Wolff of the Peterson Institute for International Economics, former Deputy U.S. Trade Representative and long-time trade law practitioner, thinks courts might say no.
Warren Maruyama, former U.S. Trade Representative Office General Counsel and likewise long-time trade law practitioner, joins CSIS’ Bill Reinsch and Lyric Galvin in the other view – courts typically ‘defer’ to Congressional laws delegating powers, and would likely do so again.
Some past Supreme Court practice –
Brig Aurora (1813, involving the seizure of cargo carried on a British merchant ship during the War of 1812).
Field v. Clark (Chicago retail pioneer Marshall Field complaint against Clark, a Harrison administration official in charge of collecting tariffs at the Chicago port, for imposing retaliatory tariffs under an 1890 law).
And a quick Congressional summary of their impact.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
