In characteristic fashion, President Trump proclaimed his new tariff package via Twitter. He boasted of the “massive Tariffs we may be imposing on China,” and then noted that they may cause Apple products’ prices to rise. One wonders why the latter part didn’t set off an alarm bell. Tariffs, after all, are a tax imposed on American buyers and manufacturers, not “on China,” and the price rises they cause won’t be limited to Apple products, but instead will be seen through the economy as a whole, including on products from industries that source their parts domestically.
Where the previous sets of tariffs targeted wide swathes of products and parts, the new tariff program will hit all imports from China. Trump has promised $200 billion that are ready to go, and explained that “behind that, there’s another $267 billion ready to go on short notice if I want. That totally changes the equation.”
Indeed it does. The Chinese have signaled that they are going to retaliate, so American manufacturers and farmers who just received subsidies for their government-induced losses will likely to have their export markets damaged even further. No amount of subsidization is going to make up for the precipitous drop in sales.
What’s more, the scope of the hike will incentivize cronyism, as well-connected companies seek (and receive) arbitrary exceptions. That private actors will seek relief is understandable, and yet the arbitrary application that will result underscores one of the core problems with Trump’s approach: That, in truth, these tariffs are not “policy” in the traditional sense of that word — that is, an idea that is discussed, developed, and debated by a legislative body before being passed — but the capricious impulses of one man. (The legislation that the president has used to levy tariffs is not new; it dates to 1962, however its very name — the “Trade Expansion Act” — shows that the Trump tariffs are not in keeping with its intentions.)
Only Congress can change this state of affairs. The Framers placed in Article I of the Constitution the origination clause, which states that “All Bills for raising Revenue shall originate in the House of Representatives,” and they followed it with “The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises.” They did this for a reason: Namely, that the House of Representatives was the closest branch to the people who would face the brunt of taxation — in contrast to the Senate, which represented states, and in even starker contrast to the executive, which was most distant of all. Today, though, the president has been empowered to impose taxes whenever he sees fit (an odd state for a nation founded in opposition to ‘Taxation without Representation”). Whether this is legal or not (I am sympathetic to the view, expressed by George Will and Brooklyn Law School’s Rebecca Kysar, that despite legislation that purports to do so, the legislative branch cannot constitutionally delegate its powers to the executive), it represents an inversion of our constitutional order.
Many weeks of debate (and years of research) preceded Congress’s passage of last year’s tax bill. The president’s tariff hike, which dwarfs that legislation in size, is being debated on Twitter. Something has gone wrong here.