American ShipperTrade and Compliance

Bill to expand presidential tariff powers introduced

The Reciprocal Trade Act would allow the U.S. to increase tariffs based on higher tariffs in other countries.

   Rep. Sean Duffy, R-Wis., on Thursday introduced legislation drafted by the White House that would allow the president to raise tariffs on imports from countries that impose higher tariffs on the same or similar goods from the U.S.
   The Reciprocal Trade Act also would allow the president to raise tariffs on goods at a rate deemed commensurate with the burden imposed by non-tariff barriers on U.S. exports of similar goods.
   Duffy’s office released a chart showing certain countries maintain tariffs significantly higher than the U.S. on some goods.
   For instance, India maintains a 100 percent tariff on motorcycles while the U.S. has a 2.4 percent tariff; the EU imposes tariffs of 68.2 percent on butter while the U.S. collects tariffs of 2.8 percent; and China has a 12 percent tariff on basketballs while the U.S. has a 4.8 percent tariff.
   Countries’ base tariff levels are set through their membership agreements with the World Trade Organization.
Pew Research Center data published in March 2018 showed that the U.S. maintains relatively low base tariffs. As described in a Pew chart, for instance, the U.S. in 2017 applied higher overall tariffs on beverages and tobacco—averaging 19.1 percent—than on any other goods category examined, which ranked as the 82nd highest average tariffs on those goods out of 137 individual countries and the EU.
   “If somebody is charging us 100 percent tariff and were charging them nothing, were entitled to charge the same tariff as them,” President Donald Trump said during a meeting Thursday with GOP lawmakers on the legislation.
   “Whats going to happen, I think, from a practical standpoint, is they wont be charging us tariffs anymore,” said Trump, according to a transcript of the meeting. “Well see. Or well charge them a lot.”
   While the White House, Duffy and 18 co-sponsors support the legislation, it would likely face some stiff opposition in Congress.
   Senate Finance Committee Chairman Chuck Grassley, R-Iowa, has indicated an intention to consider legislation that would limit, rather than expand, the president’s tariff powers.
   He told reporters Jan. 16 that he would like the committee to start with the general concept of legislation introduced in August by Sens. Rob Portman, R-Ohio, Joni Ernst, R-Iowa, and Doug Jones, D-Ala., and “work from that prospect.”
   That bill proposed to shift responsibility for starting Section 232 national security import investigations from the Commerce Department to the Defense Department and to allow Congress to strike down any future executive branch actions to impose new Section 232 remedies.
   Grassley noted that the exact legislative vehicle and timeline of any such legislation were both unclear.
   The House Ways and Means Committee didn’t respond to a request for comment on the Reciprocal Trade Act.

Brian Bradley

Based in Washington, D.C., Brian covers international trade policy for American Shipper and FreightWaves. In the past, he covered nuclear defense, environmental cleanup, crime, sports, and trade at various industry and local publications.