Politics & Policy

Congress Handed to the President the Power to Level Tariffs

(Pete Souza/White House/Flickr)
A republic needs a legislature that can handle such tasks. We don’t have one.

Trump’s decision to impose new tariffs on steel and aluminum imports set off a rash of commentary over the last week — most of it on the economics of the action. Though I’m dispositionally a free-trader, I do not presume technical expertise on the economics of the matter, so I’ll leave that to others.

Instead, I want to draw out from Trump’s decision an answer to a question that is not immediately obvious: Why in the world does the president have the power to levy tariffs in the first place?

Do not look to the plain text of the Constitution for an answer. Article I, Section 8 says:

The Congress shall have the Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.

That is, Congress, not the president, was vested with the power to levy tariffs. At the time of ratification, everybody expected that the first taxes from Congress would be “imposts” — tariffs on imported goods. That is exactly what happened, with the Tariff of 1789.

Yet the power to levy imposts has been inevitably wrapped up with matters of foreign policy, and foreign policy falls more clearly within the presidential domain. Consider the Jay Treaty of 1795. Prior to that compact, James Madison and Thomas Jefferson had urged Congress to slap tariffs on Great Britain for its refusal to deal liberally with American trade. The pro-British Federalists — above all, Alexander Hamilton — were aghast at this prospect and prevailed on President Washington to dispatch John Jay to London, to hammer out a treaty.

The finished product was highly controversial, and it passed the Senate by the minimum number of necessary votes. One of its provisions was the effective granting of most-favored-nation status to Great Britain — meaning a promise not to use tariffs as the sharp end of the diplomatic stick. Madison argued that the House had the right to refuse to implement portions of the Jay Treaty, but his endeavor failed.

After World War II, the United States became one of the world’s superpowers, and trade has been a staple of our foreign policy ever since. This has, naturally, increased the power of the executive branch. It is one of the big reasons that Trump has such vast authority on tariffs. But there is another reason, which illustrates the deep, long-running dysfunction inherent in the legislative branch — a malady so grave that it undermines the republican principles on which the country was built.

The sad truth is that Congress has long been terrible at national economic planning. This was not immediately evident when the Constitution was implemented because, apart from a brief burst of Hamiltonian policymaking in 1790–91, Congress did little to facilitate or regulate the economy. It was only after the debacle of the War of 1812, a conflict that could very easily have resulted in a massive loss of American territory, that Congress decided it had to strengthen the economic foundations of the nation.

The resulting Tariff of 1816 reflected that grand purpose. And it functioned well enough. But subsequent tariffs, in 1824 and especially in 1828, revealed the true scope of the legislature’s problem. The tariff was, in theory, a tool for Congress to promote responsible, balanced economic development that benefited the country as a whole. In practice, it devolved into a regional logroll — protecting goods from the Mid-Atlantic and Midwest while doing virtually nothing for the South, which was becoming increasingly dependent on cotton exports — that especially benefited industrial manufacturers who could influence the course of politics.

Over the course of the 19th century, the tariff became a form of regional hegemony for the North and Midwest over the South and Great Plains. It was also a ready source of funds to bankroll the oligarchic clique that took control over northern politics. The tariff was why the country ran huge budgetary surpluses during the so-called Gilded Age. It was not a sign of frugality in government. It was a sign of rampant corruption.

Over the past 80 years, authority over tariffs, as well as over all manner of properly legislative functions, has migrated to the executive branch, away from the legislative.

The Progressives of the early 20th century were reacting in large part against this congressional irresponsibility. That is one reason they called for the direct election of senators, a professional bureaucratic class, and a strong president — these were all ways to diminish the authority of a corrupted Congress that seemed to make the serious problems of industrialization worse.

Conservative Republicans recaptured control of the government in the 1920s, and when the Depression hit, they naturally looked to industrial protection (which had been a staple of GOP politics up to that point). But, as with the experiments with protectionism in the 1820s, this endeavor spiraled out of control, creating a massive logroll that jacked up tariff rates with no rhyme or reason. Herbert Hoover signed the so-called Smoot-Hawley Tariff of 1930 despite grave misgivings. He was right to doubt its merits: Smoot-Hawley worsened the Depression and helped Franklin Roosevelt win a smashing victory.

FDR brought with him to office the old Democratic favoritism toward free trade, but also decidedly Wilsonian views on the relations between president and Congress. He encouraged Congress to transfer authority on trade matters (as well as most regulatory matters!) to him. This time, the legislature agreed. It was as if Congress threw up its hands in exasperation and said to the president, “We cannot handle our authority responsibly. Please take it off our hands, for we will screw things up and lose reelection.”

So more and more over the past 80 years, authority over tariffs, as well as over all manner of properly legislative functions, has migrated to the executive branch, away from the legislative — even in instances (such as this aluminum-and-steel case) where there is no compelling or immediate foreign-policy mandate. Trump’s move is purely a play for aggrieved industrial workers, who should, in the constitutional schema, look to Congress and not the president for redress of their grievances.

And this is exactly the problem with our government in 2018. Nobody looks to Congress for redress of grievances anymore, for it would be foolish to do so! Nobody respects Congress. Nobody likes Congress. Congress, at least to judge from its members’ constant campaigning against it, does not even much like itself. Congress has systematically shrugged power off its shoulders over the past 80 years, and it inevitably screws up the handful of authorities it retains, such as income taxes and “discretionary” spending. The legislature is manifestly incapable of managing the burdens of a modern economy.

In a republic, this is a major problem, because the people are supposed to be sovereign — and it is the legislature that is supposed to represent their interests. But because the legislature cannot represent those interests responsibly, it hands power off to unelected courts or an executive with just two offices out of millions that are popularly elected.

To be clear, the tariff is not the cause of this dysfunction. Rather, it was the first real indication that congressional irresponsibility was a systemic weakness of our government, and it has come to undermine the republican notion that the people should rule.

This, to me, is more worrisome for republican government than whatever effects, great or small, Trump’s decision on steel and aluminum ultimately generate. It is not just that the president has the power to level tariffs unilaterally. It is not just that Congress handed it over. It is that Congress, the branch of the people, handed it over because it screwed it up, again and again. A republic requires a legislature that can handle such tasks, and we simply do not have one.

Jay Cost — Jay Cost is the author of The Price of Greatness: James Madison, Alexander Hamilton, and the Creation of American Oligarchy.

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