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Trade War Battles: Congress Reconsiders Its Role

Kathleen Claussen
Sunday, August 5, 2018, 11:00 AM

After many months of the executive branch taking action against U.S. trading partners, Congress is starting to push back.

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After many months of the executive branch taking action against U.S. trading partners, Congress is starting to push back. A bipartisan group of senators introduced a draft bill Wednesday to reform Section 232 of the Trade Expansion Act of 1962 under which the president has imposed tariffs on steel and aluminum imports. This is the 10th bill working its way through Congress to try to curb the trade war begun by the Trump administration.

Although the separation of trade-law powers is complex, the regulation of foreign commerce is Congress’s constitutional prerogative. Yet when it comes to tariff authority, Congress has regularly empowered the executive to manage foreign commerce without the checks that it has accorded itself in other areas.

Now, Congress appears to be rethinking what one senator has called its “helpless bystander” stance—but finding that tariff authority is far more difficult to take back than it is to give.

Numerous bills on the Hill

Here is how the trade war is playing out on Capitol Hill: Lawmakers have introduced at least 10 bills that seek to limit the president’s authority, particularly with respect to the steel and aluminum tariffs that President Trump imposed this spring citing national security concerns. Section 232 allows the president to take such action following an investigation to determine “the effects on the national security of imports” of the products in question. Two of these bills predate most of the Trump administration’s “three-digit” actions—those taken under Sections 201 and 301 of the Trade Act of 1974, and under Section 232. The cascade of legislation began in March, when the White House ratcheted up its tariff policy, and things have intensified in the last few weeks.

Members of Congress are also pressuring the executive branch in other ways. The House Ways and Means trade subcommittee held a hearing July 24 on the Commerce Department’s process of determining which products should be excluded from the steel and aluminum tariffs. U.S. Trade Representative Robert Lighthizer testified before a Senate panel July 26 about President Trump’s proposed budget for USTR and its enforcement work. And Sen. Orrin Hatch wrote to the White House last month, the Wall Street Journal reported, warning that he might support some of the bills that seek to pull back Congress’s tariff authorization. Further, as the Commerce Department undertakes two additional Section 232 investigations—one related to uranium and the other to autos and auto parts—Congress is calling on the executive to reconsider its stance on these potential actions. In a July 18 letter to Commerce Secretary Wilbur Ross, a bipartisan group of 149 House members argued that any action on autos and auto parts would hinder, rather than improve, economic security.

Lawmakers have also sought to address the impact of the executive’s trade actions. Members of Congress have introduced legislation that would mitigate the effects of retaliatory tariffs on American workers and firms, including by expanding access to benefits in the Trade Adjustment Assistance program, and provide funding to injured farmers. Another pair of bills would require greater transparency regarding the president’s personal financial stake in trade actions he directs.

In trying to rein in the Trump administration’s actions under Section 232, Congress is considering several legislative options, but it’s not clear if any of them will materialize anytime soon. Separately, the American Institute for International Steel and others are challenging the constitutionality of Section 232 on the basis that it lacks any “intelligible principle” to limit the discretion of the president. The U.S. Court of International Trade is reviewing a motion for summary judgment in that case.

The first trade-related bill introduced during the Trump administration was put forward by Sen. Mike Lee on Inauguration Day, long before the Section 232 tariffs were on the horizon. The legislation would increase reporting requirements on the executive and create the option for Congress to prevent any new tariffs from taking effect unless it passes a joint resolution of approval. This rule would apply to not only Section 232 but also other “unilateral trade actions” that the bill defines. Rep. Warren Davidson introduced a companion bill in the House in March. A bill introduced by Rep. Ron Kind on May 10 closely tracks the Lee and Davidson bills but would allow tariffs to take effect unless Congress passes a joint resolution of disapproval.

Legislation sponsored by Rep. Bill Pascrell and others in 2017 would make major structural and institutional changes to rein in the delegation of trade power to the executive, share powers more evenly across the branches, and create more enforcement authority within Congress. Pascrell also introduced a draft resolution July 24 requesting that the president transmit to the House of Representatives “any and all documents in draft or final form, including reports, memos, spreadsheets, and slide deck presentations” in his possession that relate to his determination to impose tariffs pursuant to Section 232.

Two recent bills introduced by Sen. Jeff Flake and Sen. Martin Heinrich respectively are directly responsive to specific tariffs the Trump administration has implemented. These bills would repeal the additional tariffs on steel, aluminum and solar cells.

A bill introduced by Sen. Bob Corker on June 6 has received the most attention and support. It addresses only Section 232 and, like the Lee bill from January 2017, would require a joint resolution of approval for tariffs to be imposed. It requires the president to submit a report to Congress for review describing the proposed action and specifying the reasons for action. The bill is retroactive and would allow Congress to end the steel and aluminum tariffs. Rep. Mike Gallagher and others introduced a companion bill in the House with bipartisan support on July 11.

Corker has had trouble finding the right vehicle to get his amendment through. Failed attempts to attach it to the Farm Bill or the National Defense Authorization Act have led to discussion about attaching it to upcoming revenue bills.

Now, there is growing support from members of both parties for the bill introduced Aug. 1 that would, among other reforms, bifurcate the Section 232 into an investigation phase led by the Department of Defense (rather than Commerce) and a remedy phase that Commerce would manage. This change would shift to the Defense Department the determination of whether imports threaten to impair national security.

The closest Congress has come to action on any of these options was when the Senate approved a non-binding motion July 11 to instruct conferees to an appropriations bill to include language providing “a role for Congress in making a determination under Section 232.”

What else could Congress do?

As lawmakers debate these many bills, there are still more options they could consider, although, like the bills tabled so far, some options are more realistic than others. Congress could seek to repeal Section 232—an extreme step—effectively taking back the authority it delegated to the executive. It could do so retroactively to invalidate the measures establishing the steel and aluminum tariffs. It could also consider amending the statute by inserting a sunset provision so that the authority simply disappears.

Additionally, Congress could remove or restrict the executive’s authority with respect to the types of products that could be subject to action. The statute already includes, in paragraph (f), a condition for congressional approval when it comes to actions on petroleum products. Under this paragraph, any presidential action to adjust imports of petroleum or petroleum products “shall cease to have force and effect upon the enactment of a disapproval resolution” by Congress. Lawmakers could expand the number of products subject to such a constraint. They could likewise remove or restrict authority on the basis of particular countries, such as those with which the United States has a defense alliance.

Congress could also more clearly define “national security” as used in Section 232 and limit the factors by which the executive may conclude that certain imports “threaten to impair” national security. The regulations provide some guidance, but these could be further tailored. In other areas of law, the U.S. Code and government guidance documents contain definitions of “national security” that could serve as a template for such an approach. Legislation that applies such definitions retroactively may lead to new investigations on the affected products if the Trump administration seeks to maintain course. The outcomes of such investigations could be subject to greater legal scrutiny to determine whether they comport with more precisely articulated definitions of national security.

The challenging finish line

Each bill pending in Congress targets different enforcement measures in different ways. Lawmakers appear to be divided over how to address the tariffs or whether to address them at all. Some efforts have positioned members of the president’s own party—such as Sens. Rob Portman, Corker and Flake—against the White House, even as some Democrats have opposed such measures. Regardless of which path Congress chooses, the biggest challenge is not opposition from particular members but, rather, the veto that would probably result, raising the threshold for enactment.

With the business community pressuring Congress to reclaim its authority, some action from the Hill seems likely—but exactly what remains to be seen.

Kathleen Claussen is Professor of Law at Georgetown University Law Center. Prior to joining academia, she was Associate General Counsel at the Office of the U.S. Trade Representative. She was previously Legal Counsel at the Permanent Court of Arbitration in The Hague. Professor Claussen’s primary teaching areas and research interests include: international economic law, dispute settlement & procedure, and international security and cybersecurity issues. Her work has been published in the Yale Law Journal, the Yale Journal of International Law, the American Journal of International Law Unbound, among others.

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