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Commerce

The Trouble With Trump’s Tariffs

The Atlantic

www.theatlantic.com › ideas › archive › 2023 › 08 › trump-tariff-foreign-imports-trade-policy › 675169

Last week, before taking the mug shot seen around the world, Donald Trump made news in a different way, suggesting in an interview with Fox Business that if he’s elected president, he’ll impose a 10 percent across-the-board tariff on foreign imports. “When companies come in and they dump their products in the United States, they should pay automatically, let’s say, a 10 percent tax,” Trump said. “I do like the 10 percent for everybody.”

This proposal provoked a predictable storm of criticism from pundits and economists, who correctly pointed out that a universal tariff would raise prices for consumers, hurt American businesses that rely on imported goods, and lead inevitably to a trade war that would do serious damage to American exporters. (It would also almost certainly violate World Trade Organization rules, not that Trump cares.) Less remarked on but perhaps more striking about Trump’s tariff plan was something else: its blithe confidence that the president can, if he wants, unilaterally raise prices for American consumers and businesses.

Though the fact is easy to forget, the Constitution does not give the president the power to impose tariffs or make trade policy more generally. Instead, it explicitly assigns responsibility over trade to Congress alone, awarding it the authority to set “duties” and “imposts” (taxes on foreign goods) and to “regulate Commerce with foreign Nations.” Yet when Trump talks about imposing a 10 percent tariff on imports, he’s not talking about getting Congress to do it—as we know from his record of issuing such orders, he means to do so himself.

[Peter Beinart: Will Trump start a trade war?]

How? Well, as with several other aspects of government, Congress has effectively outsourced its trade-policy power to the White House in a series of laws over the past 60 years, while putting in place few guardrails or limits on the president’s authority.

Section 232 of the Trade Expansion Act of 1962, for instance, lets the president impose tariffs as high as he wants on specific industries, as long as the Department of Commerce determines that imports in those industries pose a threat to “national security” (a term the law does not define). Section 301 of the Trade Act of 1974 lets the president, through the U.S. trade representative, take action against any “act, policy, or practice” of a foreign country that’s “unreasonable or discriminatory” (whatever that means). And the International Emergency Economic Powers Act of 1977 invests the president with the power to impose tariffs during a “national emergency” (which the president can declare at will).

The vague, ill-defined language in these laws gives the president enormous latitude to do pretty much what he wants, particularly because the courts tend to be deferential to presidential judgments about what constitutes a national-security threat or whether a foreign country’s policy is “unreasonable.” For the most part, past presidents have nonetheless been cautious about exercising unilateral trade authority under these laws. Prior to Trump, the “national security” exception had been invoked only to embargo oil imports from Iran and Libya. And although Section 301 has been cited more, since the mid-1990s it has typically been used to initiate or implement WTO settlements.

Trump, as was his wont, ignored these norms and took full advantage of the loopholes Congress left for him. According to the Peterson Institute for International Economics, he issued 41 executive orders on trade, compared with an average of 19 during the Clinton, Bush, and Obama presidencies. In 2018, Trump imposed tariffs on steel and aluminum on the grounds that the imports threatened national security, even though the Department of Defense has noted that only about 3 percent of U.S. steel production goes toward national defense, and even though the countries Trump put tariffs on included close allies such as Canada and the European Union. A year later, he announced a plan to impose a new 5 percent tariff on all imports from Mexico unless the country “substantially” stopped the flow of undocumented migrants into the U.S.; he withdrew the threat only after Mexico agreed to send more troops to its border with Guatemala.

[Derek Thompson: Trade wars are not good, or easy to win]

Most dramatically, of course, Trump used Section 301—the unfair-trade-practices clause—to unilaterally impose 25 percent tariffs on roughly $250 billion in Chinese goods, and when China retaliated, he imposed a second round of tariffs that hit another $120 billion or so in Chinese imports. Trump’s tariffs were at best loosely connected to the unfair trade practices they were supposed to remedy—which included, most notably, China’s violation of intellectual-property rules—but the language in Section 301 is, again, vague enough that this didn’t matter.

Aside from whether Trump’s tariffs accomplished any of his supposed goals, evidence that they were good for the U.S. economy is hard to come by. No meaningful revival in manufacturing jobs occurred during his presidency. And the cost of his tariffs was borne, a 2020 study by the National Bureau of Economic Research found, almost entirely by American businesses and consumers. According to an analysis by the research and consulting firm Trade Partnership Worldwide, after three years of his administration, the total cost of Trump’s tariffs to U.S. enterprise was $45 billion.

Even as Trump’s various trade wars raised prices for consumers, they were especially hard on American producers and workers, particularly in parts of the country that supported him. That’s because, as a 2020 study found, China targeted its retaliatory tariffs against pro-Trump areas. Farmers were hit by those, which by the end of Trump’s term covered 98 percent of U.S. agricultural exports. And American businesses reliant on equipment and other imports from China saw their costs rise and profit margins fall, while exporters in a wide range of industries saw sales fall, thanks to retaliatory moves by the EU and China.

The real problem with the tariffs, though, was not their macroeconomic impact. It’s the fact that they were imposed, in effect, at Trump’s whim. The rise of the “imperial presidency,” together with seemingly permanent deadlock in Congress, may have inured us to the unilateral exercise of presidential power, as more and more policy gets done by executive order rather than legislation. As a result, we’ve come to accept that a president can fight a war without Congress ever bothering to declare it, and can exercise near free rein over immigration policy without congressional authorization.

[Read: Globalization doesn’t make as much sense as it used to]

Arguably, such cases might call for a national-security exception. Yet no plausible justification exists for handing unilateral power over trade policy to the president. The imposition of tariffs is not something that demands immediate action—it can, and should, be done through the legislative process. And unlike the waging of war, in which case the Constitution does make the president the commander in chief of the military, tariffs are entirely Congress’s responsibility. It has simply abdicated that responsibility.

Typically, when you talk about policy problems in Washington, identifying what’s wrong is easy; what’s harder is finding a way to make it right. Where trade is concerned, however, the solution is easy: Congress can amend existing statutes and pass a new law to take away, or severely curtail, the president’s ability to impose tariffs. The simplest way to do this would be to set a time limit on any tariffs imposed by the president, a “sunset clause” that would require congressional approval for them to continue. In fact, Senator Mike Lee, a Republican representing Utah, offered a bill on the very first day of Trump’s presidency that would do precisely this.

Unfortunately, Lee’s bill went nowhere, and getting a similar law passed would be a major political challenge because skepticism about free trade is now common in Washington while protectionism is seen by many as a political winner. (The Biden administration has, in fact, kept Trump’s China tariffs in place.) But the issue isn’t really about whether to impose tariffs or not—after all, if Congress likes tariffs, it can enact them itself. The issue is power: the fact that the president can wake up one morning and decide he likes “10 percent for everybody”—and that changes what Americans pay for imported goods.

The Next Test for the Abortion-Rights Movement

The Atlantic

www.theatlantic.com › politics › archive › 2023 › 08 › ohio-issue-1-special-election-abortion › 674923

For the 150 or so people who filled a church hall in Toledo, Ohio, for a Thursday-night campaign rally last week, the chant of the evening featured a profanity usually discouraged in a house of God.

“With all due respect, pastor, hell no!” shouted Betty Montgomery, a former Ohio attorney general. Montgomery is a Republican, which gave the largely Democratic audience even more reason to roar with approval. They had gathered at the Warren AME Church, in Toledo, to voice their opposition to a constitutional amendment that Ohio voters will approve or reject in a statewide referendum on August 8. Many of those in the boisterous crowd were experiencing a feeling unfamiliar to Democrats in the state over the past decade: optimism.

If enacted, the Republican-backed proposal known as Issue 1 would raise the bar for any future changes to the state constitution. Currently, constitutional amendments in Ohio—including the one on next week’s ballot—need only a bare majority of voters to pass; the proposal seeks to make the threshold a 60-percent supermajority.

In other years, a rules tweak like this one might pass without much notice. But next week’s referendum has galvanized Democratic opposition inside and outside Ohio, turning what the GOP had hoped would be a sleepy summertime election into an expensive partisan proxy battle. Conservatives have argued that making the constitution harder to amend would protect Ohio from liberal efforts to raise the minimum wage, tighten gun laws, and fight climate change. But the Republican-controlled legislature clearly timed this referendum to intercept a progressive march on one issue in particular: Ohioans will decide in November whether to make access to abortion a constitutional right, and the outcome of next week’s vote could mean the difference between victory and defeat for backers of abortion rights.

A year after the fall of Roe v. Wade, the back-to-back votes will also test whether abortion as an issue can still propel voters to the polls in support of Democratic candidates and causes. If the abortion-rights side wins next week and in November, Ohio would become the largest GOP-controlled state to enshrine abortion protections into law. The abortion-rights movement is trying to replicate the success it found last summer in another red state, Kansas, where voters decisively rejected an amendment that would have allowed the legislature to ban abortion, presaging a midterm election in which Democrats performed better than expected in states where abortion rights were under threat.

[Read: The Kansas abortion shocker]

To prevent Democratic attempts to circumvent conservative state legislatures, Republican lawmakers have sought to restrict ballot initiatives across the country. Similar efforts are under way or have already won approval in states including Florida, Missouri, North Dakota, and Idaho. But to Democrats in Ohio and beyond, the August special election is perhaps the most brazen effort yet by Republicans to subvert the will of voters. Polls show that in Ohio, the abortion-rights amendment is likely to win more than 50 percent of the vote, as have similar ballot measures in other states. For Republicans to propose raising the threshold three months before the abortion vote in November looks like a transparent bid to move the proverbial goalposts right when their opponents are about to score.

“I don’t think I’ve seen such a naked attempt to stay in power,” a former Democratic governor of Ohio, Dick Celeste, told the church crowd in Toledo. As in Kansas a year ago, the Republican majority in the state legislature scheduled the referendum for August—a time when the party assumed turnout would be low and favorable to their cause. (Adding to the Democratic outrage is the fact that just a few months earlier, Ohio Republicans had voted to restrict local governments from holding August elections, because they tend to draw so few people.) “They’re trying to slip it in,” Kelsey Suffel, a Democratic voter from Perrysburg, told me after she had cast an early vote.

That Ohio Republicans would try a similar gambit so soon after the defeat their counterparts suffered in Kansas struck many Democrats as a sign of desperation. “The winds of change are blowing,” Celeste said in Toledo. “They’re afraid, and they should be afraid, because the people won’t tolerate it.”

The upcoming vote will serve as an important measure of strength for Ohio Democrats ahead of elections in the state next year that could determine control of Congress. Democrats have had a long losing streak in Ohio. Donald Trump easily won the state in 2016 and 2020, and Republicans have won every statewide office except for that of Senator Sherrod Brown, who faces reelection next year. Still, there’s reason to believe Celeste is right to be optimistic. A Suffolk University poll released last week found that 57 percent of registered voters planned to vote against Issue 1. (A private survey commissioned by a nonpartisan group also found the August amendment losing, a Republican who had seen the results told me on the condition of anonymity.) Early-voting numbers have swamped predictions of low participation in an August election, suggesting that abortion remains a key motivator for getting people to turn out. Groups opposing the amendment have significantly outspent supporters of the change.

Abortion isn’t explicitly on the ballot in Ohio next week, but the clear linkage between this referendum and the one on reproductive rights in November has divided the Republican coalition. Although the state’s current Republican governor, Mike DeWine, backs Issue 1, the two living GOP former governors, Bob Taft and John Kasich, oppose it as an overreach by the legislature.

“That’s the giant cloud on this issue,” Steve Stivers, a former Republican member of Congress who now heads the Ohio Chamber of Commerce, told me. The Chamber of Commerce backs the amendment because, as Stivers said, it’ll help stop “bad ideas” such as raising the minimum wage, marijuana legalization, and proposals supported by organized labor. But, he said, many of his members were worried that the group would be dragged into a fight over abortion, on which it wants to stay neutral: “The timing is not ideal.”

[Read: It’s abortion, stupid]

Democrats have highlighted comments from Republicans who have departed from the party’s official message and drawn a connection between the August referendum and the abortion vote this fall. “They’ve all said the quiet part out loud, which is this election is 100 percent about trying to prevent abortion rights from having a fair election in the fall,” the state Democratic chair, Liz Walters, told me.

But to broaden its coalition, opponents of the amendment have advanced a simpler argument—preserve “majority rule”—that also seems to be resonating with voters. “I’m in favor of democracy,” explained Ed Moritz, an 85-year-old retired college professor standing outside his home in Cleveland, when I asked him why he was planning to vote no. Once a national bellwether, Ohio has become close to a one-party state in recent years. For Democrats, citizen-led constitutional amendments represent one of the few remaining checks on a legislature dominated by Republicans. Moritz noted that the GOP had already gerrymandered the Ohio legislature by drawing maps to ensure its future majorities. “This,” he said, “is an attempt to gerrymander the entire population.”

To Frank LaRose, the suggestion that Issue 1 represents an assault on democracy is “hyperbole.” LaRose is Ohio’s Republican secretary of state and, of late, the public face of Issue 1. Traversing Ohio over the past few weeks, he’s used the suddenly high-profile campaign as a launching pad for his bid for the Republican nomination for Senate in 2024.

LaRose, 44, served for eight years in the state Senate before becoming Ohio’s top elections officer in 2019. (He won a second term last year.) He’s a smooth debater and quick on his feet, but on the Issue 1 campaign, he’s not exactly exuding confidence.

In an interview, he began by rattling off a litany of complaints about the opposition’s messaging, which he called “intentionally misleading.” LaRose accused Issue 1’s opponents of trying to bamboozle conservative voters with literature showing images of the Constitution being cut to pieces and equating the amendment with “Stop the Steal.” “That’s completely off base,” he said. “We’ve had to compete with that and with a mountain of money that they’ve had, and with a pretty organized and intentional effort by the media on this.”

LaRose likes to remind people that even if voters approve Issue 1, citizens would still be able to pass, with a simple majority, ballot initiatives to create or repeal statutes in Ohio law. The August proposal applies only to the state constitution, which LaRose said is not designed for policy making. Left unsaid, however, is that unlike an amendment to the constitution, any statutory change approved by the voters could swiftly be reversed by the Republican majority in the legislature.

“Imagine if the U.S. Constitution changed every year,” he said. “What instability would that create? Well, that’s what’s at risk if we don’t pass Issue 1.” LaRose’s argument ignored the fact that Ohio’s rules for constitutional amendments have been in place for more than a century and, during that time, just 19 of the 77 changes proposed by citizen petitions have passed. (Many others generated by the legislature have won approval by the voters.)

LaRose has been spending a lot of his time explaining the amendment to confused voters, including Republicans. When I spoke with him last weekend, he had just finished addressing about two dozen people inside a cavernous 19th-century church in Steubenville. He described his stump speech as a “seventh-grade civics class” in which he explained the differences between the rarely amended federal Constitution and Ohio’s routinely amended founding document. The laws that Ohio could be saddled with if the voters reject Issue 1, LaRose warned, went far beyond abortion: “It’s every radical West Coast policy that they can think of that they want to bring to Ohio.”

The challenges LaRose has faced in selling voters on the proposal soon became apparent. When I asked a pair of women who had questioned LaRose during his speech whether he had persuaded them, one simply replied, “No.” Another frustrated attendee who supported the proposal told LaRose that she had encountered voters who didn’t understand the merits of the idea.

Republicans have had to spend more time than they’d like defending their claim that Issue 1 is not simply an effort to head off November’s abortion amendment. They have also found themselves playing catch-up on an election that they placed on the ballot. “They got out of the gate earlier than our side,” the state Republican Party chair, Alex Triantafilou, told me, referring to an early round of TV ads that opposition groups began running throughout the state.

[David Frum: The humiliating Ohio Senate race]

The GOP’s struggle to sell its proposal to voters adds to the perception that the party, in placing the measure on the ballot, was acting not from a position of strength but of weakness. The thinly disguised effort to preempt a simple-majority vote on abortion is surely a concession by Republicans that they are losing on the issue even in what has become a reliably red state.

When I asked LaRose to respond to the concerns about abortion that Stivers reported from his members in the Chamber of Commerce, he lamented that it was another example of businesses succumbing to “cancel culture.”

Confidence can be dangerous for a Democrat in Ohio. Barack Obama carried the state twice, but in both 2016 and 2020, late polls showing a tight race were proved wrong by two eight-point Trump victories. A similar trajectory played out last year, when the Republican J. D. Vance pulled away from the Democrat Tim Ryan in the closing weeks to secure a seven-point victory in Ohio’s Senate race.

“Democrats in the state are beaten down,” says Matt Caffrey, the Columbus-based organizing director for Swing Left, a national group that steers party donors and volunteers to key races across the country. He’s seen the decline firsthand, telling me of the challenge Democrats have had in recruiting canvassers and engaging voters who have grown more discouraged with each defeat.

That began to change this summer, Caffrey told me. Volunteers have flocked to canvassing events in large numbers, some for the first time—a highly unusual occurrence for a midsummer special election, he said. At a canvass launch I attended in Akron over the weekend, more than three dozen people showed up, including several first-timers. As I followed Democratic canvassers there and in Cleveland over two days last week, not a single voter who answered their door was unaware of the election or undecided about how they’d vote. “It’s kind of an easy campaign,” Michael Todd, a canvasser with the group Ohio Citizen Action in Cleveland, told me. “Not a whole lot of convincing needs to be done.”

The response has prompted some Democrats to see the August election as an unexpected opportunity to reawaken a moribund state party. The referendum is a first for Swing Left, which has exclusively invested in candidate races since it formed after Trump’s victory in 2016. “It’s a great example of what we’re seeing across the country, which is the fight for reproductive freedom and the fight for democracy becoming closely attached,” the group’s executive director, Yasmin Radjy, told me in Akron. “We also think it’s really important to build momentum in Ohio, a state that we need to keep investing in.”

A win next week would make the abortion referendum a heavy favorite to pass in November. And although Ohio is unlikely to regain its status as a presidential swing state in 2024, it could help determine control of Congress. Brown’s bid for a fourth term is expected to be one of the hardest-fought Senate races in the country, and at least three Ohio districts could be up for grabs in the closely divided House.

For Democrats like Caffrey, the temptation to think bigger about a comeback in Ohio is tempered by the lingering uncertainty about next week’s outcome—whether the party will finally close out a victory in a state that has turned red, or confront another disappointment. “It would be hard for Democrats in Ohio to feel complacent. I wish we would be in a position to feel complacent,” Caffrey said with a smile. “This is more about building hope.”