Are Trump’s tariff threats constitutional? Of course not.

❝ Among the first steps being floated by the incoming Trump administration is a 5 to 10 percent tariff on imports, implemented through an executive order. It’s the sort of shoot-first, ask-questions-later action that President-elect Donald J. Trump promised during the campaign. It’s also unconstitutional.

That’s because the path to imposing tariffs — along with taxes and other revenue-generating measures — clearly begins with Congress, and in particular the House, through the Origination Clause. When presidents have raised (or lowered) tariffs in the past, they have tended to do so using explicit, if sometimes wide-ranging, authority from Congress.

❝ The founders thought about this issue a lot: After all, taxes, as every grade schooler knows, fueled the colonies’ push for independence. So they wrote the Constitution, and its Origination Clause, to give the taxing power to the part of government that is closest to the people, thereby protecting against arbitrary and onerous taxation…

❝ True, tariffs are no longer used to raise money, but to protect domestic industries, and to punish foreign ones. But they unquestionably still produce revenue. And while tariffs on imports are aimed at foreigners, they affect domestic industries that use or compete with imports; they can also have an enormous impact on the overall economy by raising consumer prices. Allowing the executive to circumvent the House to enact otherwise unfavorable tax policies that affect Americans is what the clause is designed to avoid — that those furthest removed from the people have the ability to tax them…

❝ Of course, Mr. Trump doesn’t have to act unilaterally; he has Republican majorities in both chambers that are eager to work with him. One option would be to push for a border adjustment tax, a proposal already being floated in the House as part of comprehensive tax reform, which would forbid tax deductions for imports and exempt exports from taxes.

A border adjustment tax is a far better option than tariffs. It would eliminate incentives in the current tax system to manufacture abroad, and to shift income abroad. Unlike a tariff, it aims to be trade neutral, with any changes in consumer pricing of imports and exports being offset by a rise in the dollar. And with strong support in the House, it could be enacted in full compliance with the Origination Clause, lending it legitimacy that a unilateral tariff would lack.

It won’t be difficult to find a few Representatives or Senators to oppose a move hampering any significant portion of the US economy. Waving the Free Trade flag won’t be needed. Just a phone call from any of the sectors of American business with profit centers both inside and outside our national boundaries. A phone call to a segment of the all-encompassing clot of politicians housed in Congress. The global economy was a done deal decades ago.

And that doesn’t begin to include those corporations directly filing lawsuits. Like, um, any major retailer.

4 thoughts on “Are Trump’s tariff threats constitutional? Of course not.

  1. Billions and billions says:

    The markets plunged after President Donald Trump unleashed a threatening tweet Tuesday morning. https://nypost.com/2018/12/04/stock-markets-plunge-after-trumps-tariff-man-tweet/ “President Xi and I want this deal to happen, and it probably will. But if not remember, I am a Tariff Man,” Trump tweeted.
    Donald J. Trump @realDonaldTrump 8:03 AM – Dec 4, 2018:
    “….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN”

    • Blowback says:

      (8/5/19): The Dow was set to fall more than 300 points Monday morning after China escalated the trade war with the United States.
      The Chinese government devalued the yuan to fall below its 7-to-1 ratio with the US dollar for the first time in a decade Monday. A weaker currency could soften the blow the United States has dealt China with its tariffs.
      The cheaper yuan ignited fear on Wall Street that the United States would respond with even higher tariffs, prolonging the standoff with China and potentially weakening the global economy. Investors are particularly concerned that the Trump administration could try to devalue the dollar, sparking a currency war that could weaken Americans’ purchasing power.
      “Risks of Trump intervening in foreign exchange markets have increased with China letting the yuan go,” wrote Viraj Patel, FX and global macro strategist at Arkera, on Twitter. “If this was an all out currency war – the US would hands down lose. Beijing [is] far more advanced in playing the currency game [and has] bigger firepower.” https://www.cnn.com/2019/08/05/investing/dow-stock-market-today/index.html
      (7/2719): “Trump boasts he could weaken US dollar ‘in two seconds if he wants to’ : US president asserts country could look at devaluation days after decrying strategy as unwieldy and dangerous for economy” https://www.independent.co.uk/news/world/americas/us-politics/trump-devalue-dollar-economy-china-trade-war-peter-navarro-federal-reserve-a9023226.html
      See also “Putin’s Pledge to Ditch the Dollar Is Slowly Becoming a Reality : The Russian president wants to lower the economy’s vulnerability to U.S. sanctions.” https://www.themoscowtimes.com/2019/08/05/putins-pledge-to-ditch-the-dollar-is-slowly-becoming-a-reality-a66709

      • Gwailo Joe says:

        “China has a $1 trillion trade war weapon. Will it ever use it?” (CNN Business) https://www.cnn.com/2019/08/07/business/trade-war-china-treasuries/index.html
        China has one hugely powerful weapon up its sleeve: it’s the American government’s biggest creditor.
        “In theory, Beijing could trigger a panic in bond markets by dumping some of the $1.1 trillion in US Treasuries that it owns.
        By releasing a flood of US Treasuries, the price would collapse, sending yields (or interest rates) soaring and causing American borrowing costs to rocket.
        But there are very good reasons why China is unlikely ever to pull the trigger. First, it may not have the desired effect. Second, it could backfire badly on its own economy.”

        “We hope the United States can rein in its horse before the edge of the cliff, or else we will fight to the end.” Gao Feng, Chinese Commerce Ministry spokesperson (March 28, 2019)

  2. Ho, ho, ho says:

    President Donald Trump on Tuesday said he is delaying some tariffs on Chinese imports ahead of the Christmas season to stem their potential impact on holiday shopping. https://www.cnbc.com/2019/08/13/trump-says-he-delayed-tariffs-because-of-concerns-over-christmas-shopping-season.html The Trump administration announced hours earlier that it would delay until Dec. 15 some of the tariffs that were originally scheduled to come into effect Sept. 1. “We’re doing this for the Christmas season,” Trump told reporters on an airport tarmac around noon Tuesday. “Just in case some of the tariffs would have an impact on U.S. customers.” “So far they’ve had virtually none,” the president added. “But just in case they might have an impact on people, what we’ve done is we’ve delayed it, so that they won’t be relevant to the Christmas shopping season.”
    The White House’s move to back off on the hard and fast date for the new tariffs came as a sigh of relief for markets, which have been increasingly on edge amid the intensifying trade war between Beijing and Washington. Major indexes, which had been trading in the red before the market open, shot up on the news.

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