presidential election trumpWho said he thinks “tariffs” “The most beautiful words In the dictionary, “Various types of taxes have been proposed on goods imported from other countries.
They are intended to prevent American companies from relying on parts and goods from foreign countries, including China, by making it more expensive for them to do so.
He also claimed that he did not need the support of Congress to implement the tariffs he proposed. According to economists and foreign trade experts the reality is more complex.
What has Trump proposed?
During the campaign, Trump proposed tariffs Between 60% to 100% on Chinese goodsHowever, he offered few additional details, such as whether the tariffs would apply to all goods, or just certain categories of products.
He has also proposed a comprehensive tariff policy, including a universal tax of between 10% and 20% on all imports, and promised reciprocal tariffs on any country that imposes tariffs on American-made goods.
Can Trump impose tariffs unilaterally?
Once he takes office, President-elect Trump has a few different avenues through which he can attempt to enact the type of tariffs he has proposed.
The U.S. Constitution gives Congress the power to impose tariffs in Article 1, Section 8, which states that “The Congress shall have Power to lay and collect Taxes, Duties… for regulating Commerce with foreign Nations.” ” But Congress can also selectively delegate tariff-setting authority to the President, which it has done for decades.
In his first term as President, 2017–2021, Trump used this presidential authority to increase tariffs: duties paid on US imports nearly doubled from $37 billion in 2015 to $74 billion in 2020. . Congressional Research Service,
“Given his last four years in office, he feels he has the authority to impose tariffs,” said Jake Colvin, president of the National Foreign Trade Council, a group dedicated to advocating for American companies in international commerce. “If they decide on day one that they want to use executive authority to impose tariffs on Chinese goods, they can probably go ahead and do that.”
Colvin said it will be important for the incoming Trump administration to provide more specific information to businesses so companies can plan accordingly. “A lot has been proposed during the campaign, so it's important for the Administration to provide clarity to American businesses and signal for planning purposes the path it wants to pursue,” he said.
President's authority to impose tariffs
Inu Manak, a trade policy fellow at the Council on Foreign Relations, said the president has the authority to impose a variety of trade sanctions on foreign countries.
“It seems quite clear that he will impose tariffs immediately after taking office. During his previous term, tariffs were a tool of choice in the trade war against China and against allies. So I believe this That's a strategy he'll repeat in his next term,” Manak told CBS MoneyWatch.
Manak said he would likely be able to do so without the support of Congress. “The president has a lot of discretion to do what he wants,” he said.
Legal powers at Trump's disposal include section 301 Under the Trade Act of 1974, under which the President can impose retaliatory tariffs when “any action, policy, or practice of a foreign country… violates the provisions of, or is inconsistent with, the provisions thereof, or otherwise confers an advantage on the United States Denies, under any trade agreement, or…unreasonably burdens or restricts the commerce of the United States.”
Trump has already done it trust on By default, Section 301 is meant to impose tariffs on China throughout 2018 and 2019, and it could, simply, extend existing tariff actions it has already taken.
“It won't require any action from Congress, because they're already in place,” he said.
He also used it during his last term as President section 232 Provision of the Trade Expansion Act of 1962 to impose tariffs on steel and aluminum imports. It gives the President the authority to adjust imports, including imposing tariffs, when they are found to be a threat to national security.
threat to national security
There is also the International Emergency Economic Powers Act (IEEPA), which has not been used to restrict trade since President Nixon was in office, from 1969 until his resignation in 1974.
Act They say “Any authority granted to the President…by this title may be exercised to meet any unusual and extraordinary threat…to the national security, foreign policy, or economy of the United States, if the President “Declaring emergency honors such a threat.”
“The powers conferred on the President…can be exercised only to deal with an unusual and extraordinary danger in respect of which there is a national emergency…” it adds in part.
In other words, to use the IEEPA to impose tariffs, Trump would have to declare a national emergency via an executive order, claiming that America's trading partners pose an unusual and extraordinary threat.
Allen Wm. Wolff, a former deputy director-general of the WTO and a distinguished visiting fellow at the Peterson Institute for International Economics (PIIE), is skeptical that Trump has the authority to impose sweeping tariffs under the IEEPA.
“Can it be used against trade with all countries in Europe and Asia, the Americas, our allies and friends, not to mention the poorest countries in Africa? To fall within the scope of Congress's intent This law will amount to a huge power grab,” he wrote In a recent blog post.
Discrimination against American commerce
Manak said section 338 The Tariff Act of 1930 could also give the President the authority to unilaterally increase tariffs.
The rarely used act allows the President to impose tariffs up to 50% of the value of a product, and is triggered when the President finds that a foreign country has imposed an unfair tariff on American commerce, Or discriminated against.
However, typically this conclusion must come from the US International Trade Commission (ITC). “But the language of the legislation is vague in terms of what it would look like, and I think he could move it forward without a final conclusion from the ITC, or move it forward while the conclusions are being drawn up,” she said.
Effect of tariffs on consumer prices
Some companies have already said that their goal is move production out of china To avoid Trump's proposed tariffs.
For example, shoemaker Steve Madden says he plans to import fewer goods made in China into the US and replace them with goods made in other countries.
If imposed, the proposed tariffs on imports could harm consumers Spending power is being lost between $46 billion and $78 billion every year on products including apparel, toys, furniture, home appliances, shoes and travel accessories. National Retail Federation,
According to another estimate, a 20% general tariff on all imported goods, combined with a 60% tariff on goods imported from China, would cost typical American families more than $2,600 per year. If Trump instead imposes a 10% tariff across the board, it would cost families $1,700 more. PIIE.
More concrete data on what it will cost consumers may soon be available, as experts expect Trump's proposed tariffs to be implemented quickly.
“We would imagine that within a few months of him taking office, we will see the first tranche of tariffs take effect,” Manak said.