In-Depth: Rep. Ron Kind (D-WI) introduced this bill to reassert Congressional authority over trade and tariff policy and redesignate national security threat assessments in regards to trade agreements to the Department of Defense:
“This Administration’s go-it-alone approach of resolving our trade imbalances has sparked a trade war that is hurting Wisconsin farmers, workers, and families. The National Security tariff process is being misused, at the cost of our rural and local economies. It is long-past time for Congress to reassert its constitutionally-granted power in our Nation’s trade policy and protect our export power.”
Rep. Jackie Walorski (R-ITN), an original cosponsor of this bill, adds that it’s needed to ensure that trade disagreements are handled appropriately:
“The president is right to seek a level playing field for American businesses and workers, but the best way to do that is with a scalpel, not an axe. Overly broad tariffs continue to harm manufacturers in my district and threaten our nation’s economic momentum, and it’s clear the national security tariff process is flawed. This bipartisan bill would restore fairness, transparency, and accountability to the Section 232 process, ensure these tariffs are only used when necessary to protect our national security, and give the American people a voice by strengthening congressional oversight.”
Americans for Prosperity calls this bill a “step in the right direction.” Its president, Tim Phillips, says:
“With each new tariff, American workers, businesses and consumers face what is essentially higher taxes that undermine economic expansion and job growth. The bipartisan Trade Security Act will allow Congress to provide a check on new tariffs. We support the efforts of Sen. Portman, Rep. Kind and other lawmakers from both parties pursuing legislation to provide congressional review and approval of tariff increases. Our ultimate goal should be the elimination of all protectionist policies. This legislation is a step in the right direction.”
The U.S. Chamber of Commerce, which also supports this bill, adds that previous applications of Section 232 tariffs have inflicted harm on U.S. allies and alliances:
"[T]his legislation would help restore the proper constitutional role of Congress in tariff policy by providing for Congressional disapproval of prospective tariffs designated under Section 232 of the Trade Expansion Act of 1962… Earlier application of Sec. 232 tariffs has inflicted substantial harm on U.S. industry and consumers in every state... The imposition of these tariffs on many of America’s closest allies — ostensibly in the name of national security — has also undermined U.S. efforts to build an international coalition of like-minded countries to combat the use of unfair trade practices.”
This bill has six bipartisan House cosponsors, including three Democrats and three Republicans. A Senate companion bill, sponsored by Sens. Rob Portman (R-OH), has eight bipartisan cosponsors, including five Republicans and three Democrats. It also has the support of Americans for Prosperity, the U.S. Chamber of Commerce, and Business Roundtable.
Of Note: The Trump administration has used tariffs liberally in an attempt to remedy the trade deficit. As of December 5, 2018, the Trump administration had imposed $42 billion worth of tariffs on thousands of products, and had threatened additional tariffs of up to $129 billion. The first $42 billion of tariffs were estimated to reduce after-tax incomes by 0.30 percent on average; and the effect was more pronounced for households in the middle and lowest quintiles, whose after-tax incomes were reduced by 0.33 percent. If the threatened tariffs were all imposed, after-tax income for households in the bottom and middle quintiles would fall an additional 1.04 percent, versus an average decrease of 0.92 percent.
As the Brookings Institution’s Eswar Prasad points out, “A trade deficit is not necessarily a bad thing because it means that consumers are consuming more and there is more investment happening in the economy.” Moreover, Prasad contends, there are ultimately no winners in trade wars, as they create “concerns for the economy” that reduce consumer and business confidence, leading to decreased consumption and investment in the economy.
Summary by Lorelei Yang(Photo Credit: iStockphoto.com / Kameleon007)