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.
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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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.
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.