Introduction

President-elect Donald Trump has made several recent statements concerning his intention to exercise his authority as President to raise tariffs unilaterally on goods from China, from Mexico and Canada (Washinton Post, 11/26/24), and from all countries (unilateral 10% tariff on everyone and everything – Associate Press, 11/26/24).  Tariffs are customs duties or fees that are imposed on goods entering into commerce in the U.S.  The U.S. has some of the lowest average tariffs of any country in the world, averaging in 2016 about “1.61%; that was about the same as the average rate of 1.6% for the 28-nation EU, and not much higher than Japan’s 1.35%. Among other major U.S. trading partners, Canada’s average applied tariff rate was 0.85%, China’s was 3.54% and Mexico’s was 4.36%.” (Pew Research Center, https://www.pewresearch.org/short-reads/2018/03/22/u-s-tariffs-are-among-the-lowest-in-the-world-and-in-the-nations-history/).  

This article examines the constitutional authorities and various statutes that reserve tariff authorities for Congress and some legal authorities in which Congress has delegated tariff authorities to the President.  The U.S. is a party to numerous multilateral and regional trade agreements that have binding tariff commitments that will be impacted as well.  

Constitutional Roles of Congress and the Executive Branch

Congressional Power: Congress has the sole Constitutional authority to levy tariffs under Article I of the Constitution.  It states that only Congress has the “Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States,” and “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”  This control of the finances, revenues, government budget and to regulate international commerce is one of the most important and zealously guarded powers of Congress under the Constitution. (CRS R44707 12/9/ 2016, p. 1,  Presidential Authority over Trade: Imposing Tariffs and Duties) (hereinafter CRS).

Tariff Act of 1930:  Tariffs and customs duties were an important source of revenues for the U.S. government that Congress exercised in virtually every session from the founding of the republic into the 1930s.  The Smoot Hawley Tariff Act of 1930 was a huge omnibus tariff bill that raised tariffs on almost all goods imported into the U.S. from all countries in response to the collapse of the stock market in 1929.  It had the effect of starting a trade war in which most other countries also raised tariffs. The massive reduction in trade contributed to the Great Depression that ultimately was one of the causes of World War II. 

Presidential Power to Levy Tariffs:  The President has the “Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur,” under Article II of the Constitution.  The Constitution gives no specific power to the President to raise tariffs, regulate international commerce or impose barriers to trade. Under the Constitution, the President has the authority to negotiate international trade agreements, but Congress must ratify or approve such agreements.  Because Congress has sole authority over the regulation of foreign commerce and the imposition of tariffs, the President may only levy or cut tariffs under specific delegations from Congress of their Constitutional powers.  (CRS, p, 2) 

Statutory Authorities  

Trade Promotion Authority:  In the Trade Act of 1974, Congress provided for legislative implementation of international trade agreements under an expedited legislative procedure, now known as trade promotion authority, so long as certain criteria were met. (CRS, p, 3)  Since 1975, there have been four laws granting the President Trade Promotion Authority to conclude multilateral and regional trade agreements.  All were passed with a variety of safeguards to ensure the President and the Executive branch followed Congressional objectives including the following goals:

• Specific delegation of Congressional authority to negotiate tariffs;
• Mandatory consultations with Congressional oversight committees;
• An expedited process, often referred to as “fast track” authority in which Congress agreed to approve the final negotiated agreement and its implementing legislation in a straight “up or down” vote without amendments;
• Specific time limits that often forced action on the negotiators; and
• Specific negotiating objectives.
• Tariffs are reduced to zero over time.  Under the WTO and FTA agreements, unilateral tariff increases trigger a right to retaliate by the effected country and to raise tariffs as compensation for the higher tariffs. 
• The five laws and the agreements negotiated under them are:

Antidumping and Countervailing Duties:  Under Title VII of the Tariff Act of 1930, the U.S. Department of Commerce (Commerce) and the U.S. International Trade Commission (USITC) are responsible for conducting antidumping (AD) and countervailing duty (CVD) (subsidy) investigations and five-year (sunset) reviews to provide relief in the form of higher tariffs on specific imported goods that are sold in the United States at less than fair value (“dumped”) or that benefit from countervailable subsidies provided through foreign government programs (“subsidized”). Dumping and certain subsidizing are considered unfair trade practices.  Commerce investigates the unfair dumping or subsidies and the USITC investigates whether an industry in the U.S. is materially injured by the imports.

Section 201 of the Trade Act of 1974 (Safeguards): The USITC is responsible for conducting global safeguard (escape clause) and market disruption investigations under the Trade Act of 1974. If the USITC determines that an article is being imported into the United States in such increased quantities as to be a substantial cause of serious injury or threat of serious injury to a domestic industry producing a like or directly competitive product, it recommends to the President relief that would remedy the injury and facilitate industry adjustment to import competition. The President makes the final decision concerning whether to provide relief and the type and duration of relief.  Relief may take the form of increased tariffs, tariff-rate quotas, quotas, adjustment measures (including trade adjustment assistance), and negotiation of agreements with foreign countries. 

Section 421 of the Trade Act of 1974: Under this provision, the USITC determines whether a product from China is being imported into the United States in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products. If the USITC makes an affirmative determination, it proposes a remedy. The Commission sends its report to the President and the U.S. Trade Representative. The President makes the final remedy decision.

Section 301 Trade Act of 1974 §301: Delegates authority to the Executive to modify certain tariff rates when “the rights of the United States under any trade agreement are being denied” or “an act, policy, or practice of a foreign country … (i) violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under, any trade agreement, or (ii) is unjustifiable and burdens or restricts United States commerce.”  This authority was the source for the numerous tariff increases imposed on goods from the People’s Republic of China under the prior Trump Administration.

Section 232 Trade Expansion Act of 1962 §232(b)–(c):24: If the Secretary of Commerce “finds that an article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security,” then the President is authorized to take “such other actions as the President deems necessary to adjust the imports of such article so that such imports will not threaten to impair the national security” (subject to certain procedural requirements). This authority was used to increase steel and aluminum tariffs under the prior Trump Administration.

Tariff Act of 1930 §338(a):23: “The President when he finds that the public interest will be served shall by proclamation specify and declare new or additional duties as hereinafter provided upon articles wholly or in part the growth or product of, or imported in a vessel of, any foreign country whenever he shall find as a fact that such country (2) Discriminates in fact against the commerce of the United States….” This authority is rarely used.

Uruguay Round Agreements Act §111(a) (1994):33: “[T]he President shall have the authority to proclaim—(1) such other modification of any duty, (2) such other staged rate reduction, or (3) such additional duties, as the President determines to be necessary or appropriate to carry out Schedule XX.” This is another example of an Agreement-specific delegation that allows the President to act within the confines of the Agreement.   Among this system’s core rules with regard to tariffs are: 

• Binding Commitments. Through multilateral negotiations, countries bind themselves to ceilings on tariff rates for specific imports. That ceiling is called the bound rate, which can be higher than actual applied rates. Lowering bound rates has been a general goal of each of the multilateral negotiations. 
• Nondiscrimination. Under the most-favored nation (MFN) rule, a country must extend any trade concession, such as a reduced tariff rate, granted to one country member to all other WTO members. 
• Preferential Tariff Rates:  The member countries agree to lower tariff rates for Free Trade Agreements (FTAs), Customs Unions (EU) , certain specified treatment for developing countries, and WTO-allowed responses to unfair trading practices. 
• Transparency. The WTO requires members to publish and report their tariff rates and other trade regulations. 
• Safety Valves. The WTO agreements permit members to raise tariffs to address unfair trade practices and to allow domestic industries to adjust to sudden surges in imports in some circumstances. 
• Disputes, Compensation and Retaliation.  If the U.S. unilaterally raises tariffs against any WTO member, the effected country may bring a dispute at the WTO.  I can request compensation and also retaliate by raising tariffs on U.S. goods and services.  This is exactly why such unilateral tariff increases can be said to lead to a trade war.

Summary Conclusions

The President has some legal authorities to raise tariffs for specific unfair trade practices.  There is no unilateral authority available to the President to unilaterally declare broadly based tariff increases with Executive Orders or other legal mechanisms.  Under the  Constitution, it will take an act of Congress to raise tariffs.  A broadly based set of tariff increases on multiple countries will violate numerous trade agreements and invite a flood of litigation as well as a significant likelihood of trade retaliation by affected countries.