TARRIFSCongress: Retake Control of Tariffs and Let Businesses Get Back to the “Vision Thing”
The Trump administration’s recent tariff actions are undermining congressional authority and sowing chaos for U.S. businesses. Lawmakers should reassert their constitutional power to correct course.
In his quest for the presidency in 1987, Vice President George H.W. Bush was advised to think of big, coherent, compelling ideas for the country’s future. “Oh, the vision thing,” was his infamous dismissal of the idea.
Despite Bush’s misgivings, having a vision is the foremost element for business strategic planning. Projecting how an organization envisages itself in the future helps to algin resources and effort. Uncertainty impedes planning, which then undercuts investment and economic growth. The Donald Trump administration’s spurious justifications for tariffs, accentuated by its stop-and-go approach, have created uncertainty. The Federal Reserve’s Economic Policy Uncertainty Index and the CBOE Volatility Index, the market’s “fear gauge” on equities, have risen steadily. Congress can, and should, put a stop to it.
Article I, Section 8 of the Constitution gives Congress the “Power To lay and collect Taxes, Duties, Imposts and Excises,” and “To regulate Commerce with foreign Nations … .” The Trade Act of 1974 requires legislative approval of international trade agreements. Congress has delegated powers to the president to protect against threats to national security, including the International Emergency Economic Powers Act (IEEPA) of 1977—recently used to impose tariffs on Canada, China, and Mexico—and the Trade Expansion Act of 1962 (Section 232)—used to trigger investigations on imports of steel, aluminum, copper, and lumber.
However, criteria have not been listed as to what suddenly provoked the national security threat. Forty-three pounds of fentanyl from Canada can hardly be considered a threat. Steel and aluminum, previously investigated under Section 232, were already subject to import restraints and monitoring. Decisions appear to be driven by the president’s whims. As National Economic Council Director Kevin Haslett admitted, the president will decide “what he’s going to call off and what he’s not.”
Senator Rand Paul (R-KY) has proposed the No Taxation Without Representation bill, which would reassert Congress’s prerogatives on tariffs by requiring it to approve any presidential proposal to impose tariffs, including under the provisions of the IEEPA and Section 232. Paul’s proposal could be strengthened by requiring mandatory reviews of any tariffs and lifting them once the national security threat has subsided.
Congress should feel emboldened to take such action.
First, it is their right and duty.
Second, unilateral imposition of tariffs by the executive office is contrary to congressionally approved agreements, inviting retaliation from foreign trading partners and generating even greater uncertainty for U.S. businesses to contend with.
Third, the imposition of reciprocal tariffs—when country A charges a duty on goods from country B, then country B imposes the same duty in return—does not reflect the reality that foreign tariff rates are a product of U.S. negotiations, either multilateral or bilateral, approved by Congress. South Korea’s average tariff rates could be four times those of the United States, as President Trump pointed out. However, the U.S.-Korea Trade Agreement, slightly modified by the Trump administration in 2018, “reduces and in most cases eliminates tariff and non-tariff barriers between the two parties on manufactured goods, agricultural products, and services,” according to the 2021 Congressional Research Service report. If the passage of time and changing trade patterns make previous deals appear unbalanced, the proper way to restore the balance would be for Congress to authorize new negotiations.
Fourth, U.S. tariffs and foreign retaliation will affect a broad swath of small and large U.S. businesses throughout the country, unlike Elon Musk’s Department of Government Efficiency (DOGE), whose disruption of congressionally authorized funding initially has been confined to federal government agencies.
Fifth, tariffs generally translate into higher costs for consumers.
Sixth, frivolous assertions of serious threats to U.S. national security make a mockery of Congress’s solemn intent. Such specious actions bring to mind litigation in the first Trump administration in which the government lawyer refused to answer the judge’s question as to whether imported peanut butter could be a threat to national security.
And seventh, for Congress to fulfill its constitutional duty to regulate foreign commerce, it needs the government to be credible in negotiating and abiding by international agreements.
Congress is at a crossroads: completely cede its constitutional authority to set tariffs, or reestablish it; invite the law of the jungle, or respect the international agreements it approved to regulate foreign trade; allow chaos to reign, or promote certainty in international trade. If it chooses the latter, business can get back to planning and investing for the future—that “vision thing.”
James Wallar is a former U.S. Treasury official and advisor to the CFR RealEcon initiative. This article is published courtesy of the Council on Foreign Relations (CFR).