Trade War Watch: Congress Tries a New Tactic to Block Auto Tariffs

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.