Name: The President Didn't Always Have Power Over Trade Deals
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The President Didn't Always Have Power Over Trade Deals

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September 13, 2022Some in Congress of trade policy back from the president. It might surprise you to learn that lawmakers ever had it.Until the 1930s, it was Congress that set the terms of United States trade negotiations with other countries and raised and lowered tariffs as it saw fit, while the president did little but sign his name. Over the ensuing decades, however, the legislative branch began to cede more and more power to the executive after a trade war sparked by protectionist tariffs worsened the Great Depression.As a result, President Donald Trump today has been able to and launch trade wars with several countries—including allies—without a word from Congress. For some lawmakers, his , since aborted, to impose a 5 percent tariff on everything that crosses the border from Mexico .I'm an economist who has worked on the of . To provide context on what's happening today, I thought it was worth revisiting the history of how lawmakers lost their trade powers.Until the 20th century, the president had little say in how the U.S. conducted trade. gives Congress the exclusive authority to raise taxes. And since tariffs are, by definition, a type of tax paid on goods and services imported from overseas, Congress carefully guarded its authority in this area, particularly since they were the for the federal government until the creation of the income tax in 1913.As a result, debates over tariffs made up the biggest economic fights of the 19th century and to .This is not to say that the president had no influence over trade policy. But all changes in tariffs necessarily started as legislation in the House of Representatives since they were, after all, . Therefore, before the bill got to the president's desk, it would go through a full congressional debate with committee reports, amendments, filibusters, and the like.The Great Depression marked a sharp turning point in U.S. trade policy.Just as the Depression began, Congress . It raised prices on imported commodities like wool rags, which were necessary in the clothing industry. It also —which in turn hurt America. For example, Germany, still recovering from World War I and subsequent reparations payments, saw its exports to the U.S. fall by $181 million. As a result, German consumers had fewer U.S. dollars to spend, and U.S. exports to Germany fell by $277 million.And that's the problem when hundreds of lawmakers with scores of often narrow interests are in charge of trade policy. As , tariffs imposed during this era weren't designed to maximize national welfare; they instead represented the wishes of interest groups and institutions of the legislative branch.While this misbegotten legislation did not cause the Great Depression, it almost certainly . And, as a result, the Roosevelt administration worked to seize control of trade policy from Congress. This effort led to the the , which provided the president with the authority to negotiate tariff agreements with foreign governments as long as both sides mutually lowered their trade barriers.Congress' role was reduced to primarily ratifying those agreements—or not—with a simple majority vote.Raising tariffs, however, still required an act of Congress. that this legislation, by removing power over tariffs from Congress and linking trade policy to agreements negotiated by the president, was key to winning political support for freer trade across the world, including the General Agreement on Tariffs and Trade and its successor, the World Trade Organization.Average U.S. tariffs fell from . This increase in free trade was one of the institutional underpinnings of the in , "More authority shifted to the president with the , which gave him the authority to unilaterally raise tariffs on national security grounds. Trump , known as Section 232, as justification for the steel and aluminum tariffs that he imposed on most U.S. trading partners in the spring of 2018.The established for the first time what is known as . Also called "fast track," this let the president negotiate comprehensive trade deals that included a broad array of non-tariff issues such as quotas and intellectual property protections. Congress could only approve with an up or down vote within 90 days—no amendments or filibusters allowed.That authority expired in 1980, and Congress has reauthorized it six times since, .Proponents of fast track that it is necessary to give the president credibility when negotiating agreements. If foreign counterparts believe that an agreement is likely to become bottled up in or amended by Congress, they may be reluctant to make concessions. that it delegates too much authority to the executive branch and unduly limits the ability of Congress to debate whether a particular agreement is in the national interest.While the tariffs Trump and have alarmed lawmakers, the threat to place duties on all imports from Mexico , .Trump's claim that gave him authority to impose the tariffs, as well as the expected to result, galvanized Senate Republicans to .The may point to a broader reassertion of its role in tariff policy. Even as far back as 2015, when the reauthorization of fast track, lawmakers in the House , with most Democrats in opposition.While Democrats and Republicans are largely coming at this issue from different directions, both have found reason in recent years to question the decades-old consensus that has made trade policy the prerogative of the executive branch.And Trump's trade policies have put him on a .This article was originally published on . Read the . William Hauk is an associate professor of economics at the University of South Carolina.CLOSECLOSECLOSECLOSE

September 13, 2022Some in Congress of trade policy back from the president. It might surprise you to learn that lawmakers ever had it.Until the 1930s, it was Congress that set the terms of United States trade negotiations with other countries and raised and lowered tariffs as it saw fit, while the president did little but sign his name. Over the ensuing decades, however, the legislative branch began to cede more and more power to the executive after a trade war sparked by protectionist tariffs worsened the Great Depression.As a result, President Donald Trump today has been able to and...

The President Didn't Always Have Power Over Trade Deals

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