By on January 31, 2019

us-capitol, public domain

With the United States’ government shutdown now over, lawmakers have an opportunity to work together as promised. Interestingly, one of the first pieces of bipartisan legislation to emerge after the federal bureaucracy resumed operations involves a plan to severely limit presidential authority to impose tariffs for national security reasons.

The Bicameral Congressional Trade Authority Act, introduced by Senators Patrick Toomey (R-PA) and Mark Warner (D-VA), along with House Representatives Mike Gallagher (R-WI) and Ron Kind (D-WI), would require the president to get approval from Congress before taking any trade actions based on national security threats. If passed into law, the bill would let the Legislative Branch effectively block the tariffs being proposed by the Trump administration on automobiles and automotive parts. 

According to Automotive News, the bill has already seen support from 51 separate trade associations — including the Association of Global Automakers, the American International Automobile Dealers Association, and the Motor & Equipment Manufacturers Association.

In addition to the automotive tariffs under consideration, the bill could also undo Trump’s steel and aluminum tariffs. Since the bill stipulates that Congress must approve any national security tariffs imposed within the last four years, it could retroactively adjust everything done under the current administration. It also redefines how the term “national security” can be interpreted and requires the Defense Department — instead of the Commerce Department — to conduct additional investigations under the 232 section of the Trade Expansion Act of 1962 (which allows trade actions to be taken for national security reasons). Another change would require the International Trade Commission to report to directly to Congress on the downstream impact of recent and future national security trade decisions.

There are a lot of ways to look at this. Oversight between the three branches of government is probably the only reason the country still works. But critics of the Trade Authority Act claim this gives Congress too much power. Some even suggest it’s more about helping global businesses than keeping American jobs, or tantamount to curling up to be steamrolled by China. But there are plenty of other angles to consider.

“Tariffs are tax increases on American workers and families,” co-sponsor Sen. Ben Sasse (R-NE) said in a statement. “Yes, we have to get tough on China and others, but protectionism is weak — not strong. The false pretense of ‘national security’ shouldn’t drive a unilateral trade agenda … The Constitution puts trade and tariff policy in Congress’ hands. These tariffs are a real gut-punch to family budgets so it makes sense that Congress — the lawmakers who can be easily hired and fired by the American people — should debate them.”

Automakers and their suppliers are both spending more to account for the retaliatory tariffs being thrown around in the U.S., China, and Europe. And a lot of the associated costs resulted in manufacturers proposing fewer jobs and price increases across the globe. So there is a case to be made that limiting tariffs could help the industry and consumers. However, there are no guarantees that other countries will follow America’s lead if the bill passes into law.

While the president would no doubt veto the bill, its bipartisan nature gives it a decent chance of being passed with the two-thirds majority it needs in both the House and Senate. We will be sure to keep you updated.

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51 Comments on “Trade War Watch: Congress Tries a New Tactic to Block Auto Tariffs...”


  • avatar
    Asdf

    That’s excellent news – for China…

    • 0 avatar
      highdesertcat

      It’ll never get signed by President Trump.

      Well, let me rephrase that, “It’ll never get signed by President Trump unless they also give him $50BILLION for that wall.”

    • 0 avatar
      Null Set

      Not at all. Since Trump didn’t invoke “national security” to justify his tariffs on China. He did, however, do so in the case of that well-known global evil-doer and enemy of the US: Canada.

      Nothing about this law would prevent Trump from imposing tariffs for clear economic reasons.

      • 0 avatar
        formula m

        Apply Tariffs to evil National Security Threat Canada (check)

        Lift sanctions on Russia and it’s Oligarchs (check)

        Let Ivanka’s patents be sorted out with China first, then get to the Trade War thing (check)

        Everything look good here Mr. Putin???

        • 0 avatar
          MBella

          Can’t get all your info from CNN. This whole Trump is controlled by Russia thing is ridiculous, and people keep repeating it over and over on the liberal networks. There’s plenty of real things to criticize Trump for, you don’t have to make things up. Not coming to this realization is really going to hurt Democrats again on 2020.

          • 0 avatar
            highdesertcat

            Try NEWSY out of Chicago. Chan 283 on Dishnetwork.

            It’s different and it’s not partisan FOX, MSNBC, Bloomberg or CNN.

          • 0 avatar
            Dubbed

            When someone acts as suspicious as the President of the US towards Russia you can be very justified in thinking there is something there.

          • 0 avatar
            Luke42

            The only thing you have to do if you want to make Trump look bad is to let him speak for himself.

            He contradicts himself constantly, which is a red flag that you’re listening to a fool. And that’s before we get to actually fact-checking what he says — which makes the guy look even worse for the truth, and for America.

            Switching to right-wing news sources doesn’t make the fact that Trump’s own words make him look bad go away. You just get to watch news hosts bend over backwards to explain why today’s gaffe is actually brilliant. I’ve tried to see it the Fox News way in the interest of being open minded, but I’d have to be so open minded that my brain would fall out to be able to accept those rationalizations.

            Sorry, the news media isn’t what makes Trump look bad. Trump’s own words, on Twitter and on camera, do the work.

      • 0 avatar
        dougjp

        Yup, and we in Canada will never forget it.

        • 0 avatar
          bullnuke

          Canada, as well as Mexico, were “street-level dealers” for China, the “Supplier” of the re-labeled/re-packaged steel products that avoided import duties…

          • 0 avatar
            Luke42

            You do realize that cheap steel is good for manuracturers in the US, right?

            And that there are a LOT more American jobs in industries that USE steel than in the steel industry?

            Any competent economist will tell you that you’re making the the steel-using industries in the USA less competitive in order to subsidize the steel-producing industry in the USA, and that this is a net-negative for the economy.

            The automotive industry is a steel-using industry in the USA.

            National leaders need a sense of proportion and a competent economic adviser in order to govern effectively. I’m not seeing either of these things from the Trump administration.

  • avatar
    CombiCoupe99

    Get rid of the chicken tax. Let us have smaller trucks again.

    • 0 avatar
      brn

      Stop taxing the %#$%& out of US exports and we can talk about the chicken tax.

    • 0 avatar
      DenverMike

      Europe’s chicken tax (against import pickups/vans) is just as relevant or irrelevant, depending on your POV. But I’d wager you’ve never heard about it.

      • 0 avatar
        Vulpine

        Europe’s “Chicken Tax” was literally against US chickens, not against import vans/pickups. The US “Chicken Tax” was America’s response to that and is the only one blocking trucks/vans.

        • 0 avatar
          DenverMike

          You’re wrong. And it’s partly the media’s fault for ignorance on the topic, including TTAC. They like to tell one side of the story and the US is always the villain.

          Yes Europe fired back with a high tax on import pickups and vans.

          Or did you think EU market midsize pickups built Europe was just for fun?

        • 0 avatar
          Vulpine

          WHAT, “mid-sized” pickups in Europe? When I was there, the only pickups I saw that were not VWs were American full-sized pickups and they were usually being driven by American military personnel or were quite obviously military surplus. That was in 1977-’79.

          The Chicken Tax is call the “Chicken Tax” totally due to Chickens.

          • 0 avatar
            DenverMike

            Yeah nothing could’ve possibly changed in the 40 years since you’ve been there.. What???

            This is a perfect example of how things work in your parallel universe.

            Yes Europe has a full and rich midsize pickup market, albeit niche, but most of the globals are represented, except GM (Holden), Mahindra and a couple others.

            But the market for them is very niche partly because of the EU version of a Chicken tax on import pickups and vans. Remember Europe is big on non-tariff barriers also, plus midsize pickups, even diesels, drink a lot of fuel, compared to typical EU cars.

          • 0 avatar
            Vulpine

            Stop trying to move the goalposts, DM; the Chicken Tax was enacted 40 years ago, not yesterday. Europe may have a “full and rich midsize pickup market” today, but NOT 40 years ago when the whole thing started.

          • 0 avatar
            DenverMike

            Who cares about 40 years ago? That’s your “goalpost” anyway. But actually, back then the US wasn’t big on buying mini-trucks in any meaningful way. It was a few years after that, the Mini Truck Craze hit (the US) and their sales absolutely exploded.

            Perfect Storm and whatnot.

            Europe has never been big on “open cargo” beds anyway, but in case you haven’t noticed, there’s a midsize global pickup craze going on right now, and Europe is obviously joining in, but still at niche capacity for now.

            Stay tuned.

          • 0 avatar
            Vulpine

            Ok, DM. You’ve gone far enough. This discussion started with how the Chicken Tax messed up the compact pickup market. That event happened 40 years ago and is STILL messing up the pickup market, which includes all sizes.

            To understand what is happening now, you have to understand what happened then, and despite all of your arguments over the years, you clearly don’t understand. You pass too much off as “fad” and “cheapskates” and ignore the fact that the Chicken Tax drove up the prices of import trucks to the point they were priced nearly the same as full-sized trucks here in the States. That’s the ONLY reason they died off. The only way to bypass the Chicken Tax was building those trucks right here and only Toyota and Nissan had the wherewithal to get a true assembly line started here quickly enough. The rest had to rely on their American partners to build a truck they could share and Mitsubishi, in particular, lost out as Chrysler chose to build a bigger version that was the first, true, mid-sized truck. The Ranger replaced the Courier and the S-10 replaced the LUV. With the CAFE regulations continually tightening, rather than adhering to CAFE’s requirements, the American OEMs took the waiver by keeping the trucks’ size and abilities just above CAFE’s maximums for affected vehicles–keeping them classed as working vehicles needing more power (and therefore fuel) for their loading and towing capacities.

            It’s all there, you just have to recognize it and not blind yourself to what you don’t want to see. Those increased capacities fed the typical American belief that Bigger is Better, yet not all that long ago we heard people complaining about a full-sized truck that couldn’t even qualify as a half-ton due to a mere 750 pound load limit. The full-sized trucks have gotten bigger but in most ways they are not really better than if they’d remained their ’70s size and just improved the drivetrains. Oh, I know there are other factors involved but growing into these bloated Road Whales™ was simply unnecessary–they’re merely the result of continuing efforts to dodge the law rather than complying.

            And again, all of this started over 40 years ago because of chickens.

          • 0 avatar
            DenverMike

            No it started with the US being more a victim of import taxes than the villain. Just remember who fired the first shot and has kept on firing with bigger guns.

            Then it went on with you denying Europe has a huge chicken tax against all import pickups and vans too.

            Yes it all started with chickens, except it was 55 years ago now, and started with an attack on US chicken grower/exporters.

            But you’re also wrong (AGAIN!) about what killed off the wild Mini Truck Craze in the US. You see that all happened LESS than 40 years ago, and yes the Chicken tax was there the whole entire time and had no effect.

            Not only were cut-rate import pickups much cheaper than fullsize pickups, they were quite a bit cheaper than compact cars too. A few hundred dollars went a long way in the early ’80s.

            Compact cars were hard to get too, thanks to the VIR embargo.

            So it set off a massive HOT Trend never seen before in automotive history, which had little to do with “pickups” in the “work” related sense. Fullsize pickup sales went on as normal.

            Mini-Trucks, “sporty” and fun as they were considered and marketed, and for the young, or young at heart, TOTALLY infiltrated the mainstream market in a HUGE dramatic way, mostly folks that had never owned a commercial type vehicle, from about every walk of life, and mostly haven’t owned one since the fad ended/collapsed.

            It was a trend that couldn’t sustain, with all the impractical things that come with pickups, rough ride, etc, plus most of them were “regular cabs” 2wd, vinyl seats and crank windows anyway.

            Not unlike huge bell-bottom pants and big hair with took a full can of hair spray, the insane Mini Truck Craze had to die.

            BTW, in a pinch, you could still give passengers a ride in the bed legally.

            The Chicken tax didn’t change in that frame time, the market did.

          • 0 avatar
            Vulpine

            @DM: See? you just HAVE to keep denying the truth. I don’t know why, but you do. Yet again you make the exact same claims and bring NO evidence in to prove your point. I’ve given you enough evidence over the years to show how wrong you are and yet you refuse to accept it. Even the guys at PUTC have acknowledged that the Chicken Tax has got to go.

          • 0 avatar
            DenverMike

            When did I say the CT didn’t need to go? And stop talking in vague generalities. What EXACTLY are you disputing? You want a link for every darn sentence or it’s all fiction or something.

            Geeze you’re impossible to have a conversation with. You must be a hoot at dinner parties, picnics and whatnot.

            Any way, most of my statements are well known history, but I’ve got pure facts on my side either way. So anytime you’re ready, don’t be shy.

  • avatar
    brn

    Retroactive legislation? More political games.

  • avatar
    Vulpine

    Of course, we all realize it would take no less than two votes to pass this as law: Once to submit it for the President’s signature and once to override Trump’s veto.

  • avatar
    ajla

    “As soon as there’s a supermajority willing to go against Trump in the Senate, Trump will be impeached shortly afterward.”

    As soon as a radioactive arachnid bites me, I will become Spider-Man shortly afterward.

    Both have an equal chance of occurring.

  • avatar
    tomLU86

    Wow! So Sasser discovered the Constitution puts “trade and tariff policy in Congress’ hands”

    Really? How about “coin money and regulate the value thereof”. COIN being key. No, we have Fiat money that enables government giveaways and keeps both parties in power.

    How about declaring war? No, we just blow up countries at the Presidents whim, at the cost of thousands of Americans and hundreds of thousands of natives, as we spend trillions.

    Trump beat both parties because he spoke the truths everyone else glossed over. Free trade has done a lot of damage. Our wars are bankrupting us. We should work with Russia, not restart the Cold War.

    I bet the automaker lobbyists, led by GM, which would like us to forget how the have outsourced North American jobs, want business as usual

    How much in contributions did Sasser et al get to discover ‘bipartisanship’ and ‘tariffs and the constitution’?

    Can TTAC find out?

    • 0 avatar
      Luke42

      Congress delegated its trade authority to the president through multiple acts of Congress.

      It worked just fine until now, because previous administrations understood that a trade war is an activity where you repeatedly hit yourself in the head with a hammer (economically speaking) until your opponent decides to give up.

      But the current administration likes to swagger in to no-win situations — like trade wars and government shutdowns.

    • 0 avatar
      ect

      Where to begin?

      Let’s start with the fact that there is effectively no difference between coins, paper money and virtual money. All, in the end, are based on confidence as a medium of exchange, which is bestowed by national governments and central banks.

      The theory of comparative advantage was first formally published in 1817 (it drew on earlier work, to be sure) and has never been contradicted – it continues today as one of the foundation stones of economics.

      To that point, we have been proving since at least 1846 that tariffs reduce prosperity and kill jobs. And since 1937 that Keynes was right.

      History tells us that the low-skilled and unskilled manufacturing jobs that have left North America are never coming back, just as the unskilled agricultural jobs that disappeared in the early 20th century are gone forever. And if they did somehow return, who would fill them? The US economy has been at virtual full employment since 2016.

      And btw, notwithstanding Trump, coal isn’t coming back either. It’s simply no longer economic, and is becoming less economic every day.

      Public policy should be about planning for the future, not trying to cling to an idyllic view of the past.

      • 0 avatar
        redapple

        ECT

        Coal will not go away completely. As demand falls, price will fall. China and India will gladly take it and continue to Pollute like hell.

        The coal will be used. Instead of in the USA with pollution controls. But in China and India with few controls.

        Therefore, real pollution will INCREASE due to Osama / democrats war on coal.

        • 0 avatar
          thelaine

          Yes, worldwide demand for coal will continue to increase as prosperity increases. Developing countries buy all the coal they can afford. In the US, coal is losing out to clean, abundant, affordable natural gas brought to you by your friendly local fracker. Worldwide coal demand, however, will remain strong. Coal is not dying.

        • 0 avatar
          formula m

          Just to be clear. You sound like pieces of garbage, not patriots when you defend Trump.

        • 0 avatar
          ect

          redapple and thelaine, you’re both entirely wrong. DoE and other data tells us that coal is no longer competitive with natural gas or land-based wind generation, will shortly no longer be competitive with off-shore wind or ground-mounted solar.

          Thanks to technology, the cost of renewables is steadily falling. The cost to mine coal is not – if anything it will increase as the more easily-obtained deposits are exhausted.

          As Bloomberg reported in November,

          “Unsubsidised solar and onshore wind are now the cheapest source of new bulk power in all major economies except Japan thanks to falling technology costs.

          That’s the findings of a new report by Bloomberg New Energy Finance, which examines the levelized cost of electricity (LCOE) worldwide of different power generating and energy storage technologies, excluding subsidies.

          The report out today says that solar and/or onshore wind are now the economic generation source of choice, even in China and India “where not long ago, coal was king. In India, best-in-class solar and wind plants are now half the cost of new coal plants.” ”

          This is data, it has nothing to do with politics.

        • 0 avatar
          JD-Shifty

          who pays for the black lung disease and pollution from coal mining?

      • 0 avatar
        Lockstops

        There’s nothing worse than an idiot who thinks they’re a genius.

        Wow, you’ve read economics 101 where it says that ‘tariffs are bad’. Go tell that to the Swiss. They are prosperous and especially happy propping up their outdated farming etc. though tariffs, just so that they can live a happy life the way they want to live it, even if it means inefficient small farms.

  • avatar
    tomLU86

    History tells us that debasement of the currency is not a good thing, which is why the Constitution explicitly states “COIN money and regulate the value thereof”. They wanted ‘hard’ money.

    Beginning with FDR, and finally with Nixon going off the gold standard ‘officially’ in 1971, our money is paper. Inflation is a hidden tax.

    As far as tariffs, America’s bloodiest war was about them. The southern states, led by plantation owners (who benefited from slavery), wanted “free” trade. They wanted to sell their cotton and tobacco to England and France, and buy manufactured goods (furniture, coats, clothes, tools) from THEM, because they were better and cheaper.

    It was a win-win. Why pay more for less? Hmmm….where have I heard that before?

    On the other hand, the Republican party, tool of big business in the North, in the early stages of industrialization, wanted tariffs. They found it hard to compete against the more developed Europeans.

    Well, the North (big business/big money/Republican party) won the “War Between the States”. And guess what? They set the trade and tariff policy to their liking.

    Nurtured by trade barrier, America’s infant manufacturing was able to leverage America’s considerably greater assets (land, natural resources, a SINGLE central govt and large market, and no natural enemies except for Native Americans) eventually grew big and strong enough to stand on it’s own and not need tariffs. By 1914, the USA had become the worlds largest, most productive economy, eclipsing the British Empire.

    If you look at every economic success story, from Germany to Japan to South Korea to China, you will see that these countries did not ‘play fair trade’, they played ‘benefit our companies so they can get bigger and they can get richer so our nation can be more prosperous”

    That’s real history.

    • 0 avatar
      ect

      That’s not real history, at all. Britain led the world into the Industrial Revolution, in part by steadily removing tariffs and embracing free trade. It was inevitable that the US economy would become larger – not only is the country much larger, but by 1914 US population was already virtually twice that of the UK.

      It is worth noting that much of the growth of US industry and infrastructure in the 19th century was financed by British bankers.

      And it is also worth noting that, since 1945, the world has counted on increasing economic growth by reducing trade barriers – for good reason The European Common Market (now European Union) is a poster child for the success of this policy.

      • 0 avatar
        tomLU86

        The EU, and Common Marrket that preceded it, enabled freeer trade within Europe. While in macro terms Europe became more prosperous, it also enable German industry and French agriculture to profit at the expense of Southern Europe.

        Here at TTAC, in general, most of the commentators, myself included, think positively of Toyota and Honda.

        One was favored by MITI, one not, but both grew in the safe, warm incubator that was Japan’s highly closed auto market. Korea did the same.

        If American companies had access, perhaps things might be different. I don’t fault the Japanese—I commend them. Early on, the Japanese consumer ha# to pay more for less. But the Japanese automakers (and electronics) figured it out , so by the 1970s they were good, and since the 1980s, the6 have been unbeatable, helping employ Japanese and making Japan more prosperous.

        Absent an closed Japanese market, things today might be different for them…and the US

      • 0 avatar
        Lockstops

        Wow, you really have absolutely no idea what you’re talking about.

        Britain led the world into the industrial revolution due to the inventions that created industry. Then of course they wanted to remove trade barriers because they were the economic powerhouse. Duh!

        British bankers financed much of the growth of the US industry because they thought they owned it, and then when they didn’t they could still operate there and due to a low amount of socialism it was a booming economy.

        You calling the European Common Market a poster child is hilarious.

        It couldn’t be more obvious that you are an ideological believer, that you first decided (or were programmed to believe) that trade barriers are bad and then attempted to conjure up evidence for that.

  • avatar
    Art Vandelay

    Politics today is like watching a football game. You root for your team no matter what. But it’s gotten worse. Someone set the stadium on fire. Now you root for your team and blame the other teams fans for setting the stadium on fire and they return the favor.

    Trouble is none of you bozos will bother to put the fire out and eventually the stadium burns down. There aren’t enough of us sane folks that just want to sell our beer and hot dogs in peace to put the fire out so now we are screwed. Then there in the wreckage that was the stadium you idiots start blaming each other for the fact that there is no stadium anymore.


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