Document: Trump May Act Unilaterally on Trade
President Donald Trump is claiming authority under the Trade Act of 1974 to unilaterally impose restrictions on imports.
That was one of the key points of the president’s National Trade Policy Agenda, which was submitted to Congress yesterday as required by law.
Not surprisingly, given the rhetoric of the president and his advisors, the document emphasized US sovereignty over its trade policy, and, on a related topic, bashed multilateral trade deals in favor of bilateral relationships, in which, the paper asserts, the United States can better exercise leverage over its partners.
The document asserted that, under Section 201 of the Trade Act of 1974, “the president may impose relief if increasing imports are a substantial cause of serious injury to a domestic industry. This safeguard provision, used most recently by President George W. Bush in response to a harmful surge of steel imports, can be a vital tool for industries needing temporary relief from imports to become more competitive.”
There’s no question that Congress has transferred a number of powers to regulate foreign commerce to the president (despite Article I Section 8 of the Constitution giving Congress power over foreign and interstate commerce), but this assertion in the Trump administration document overstates the president’s authority under Section 201. The section allows domestic industries to petition the International Trade Commission for safeguard relief from foreign imports. In the case of President Bush, he ordered his trade representative to ask the ITC to initiate an investigation into the potentially harmful impacts of foreign steel imports. The investigation was begun in June 2001 and the relief was granted by presidential proclamation–in the form of higher tariffs on foreign steel–in March 2002.
On the theme of asserting US sovereignty over its trading system, the paper is critical of World Trade Organization processes and provisions, saying they have favored China at the expense of the US and “undermine confidence in the trading system.” The paper also asserted that the US will not automatically follow WTO rulings. “If a WTO dispute settlement panel – or the WTO Appellate Body – rules against the United States,” the paper said, “such a ruling does not automatically lead to a change in US law or practice….[T]he Trump Administration will aggressively defend American sovereignty over matters of trade policy.”
“Going forward,” the paper continued, “we will tend to focus on bilateral negotiations, we will hold our trading partners to higher standards of fairness, and we will not hesitate to use all possible legal measures in response to trading partners that continue to engage in unfair activities.”