Donald Trump has proposed one of the biggest tax increases in American history – OCRegister
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Last week, former President Donald Trump proposed that, if he becomes president again, he will impose a 10% tariff on imports into the United States. Such a tariff, he claimed, would stem the flow of American jobs overseas and lessen US dependence on foreign imports.
America did indeed witness vulnerability to denial of precursor chemical pharmaceuticals from India during Covid, and rare earths needed for electronics production from China today. Trump also praised a 10% tariff as a source of government revenue, noting that federal government revenue relied almost entirely on tariffs in the 18th and 19th centuries, before we adopted an income tax.
Economic studies by the non-partisan, non-profit Tax Foundation (founded in 1937) challenged President Trump’s proposal. The Tax Foundation notes that the economic impact of tariffs is shared between buyers and sellers, just the same as any other retail tax; so that what President Trump is proposing is actually one of the most massive increases in taxes on Americans in history.
The Wall Street Journal reported that, during the Trump Presidency, new tariffs cost American consumers $80 billion dollars. Further, all of America’s trading partners would be likely to retaliate with their own tariffs on American exports. The impact on jobs in America’s export sector would be devastating. Pres. Trump dismissed these points, based on actual historic data, as “corporate-funded studies.”
Dependency on foreign supply in specific categories of goods deserves individual attention, rather than an across-the-board 10% tariff. The US was caught without adequate stockpiles of personal protective equipment in the early stages of COVID, as well as certain chemicals needed to manufacture therapies.
Australia recorded a dangerous shortage of anti-COVID vaccine when India canceled the contracts Indian pharmaceutical companies had in place to supply Australia’s needs. An assessment of American’s dependence on imports for individual products, industry-by-industry, is being undertaken by President Biden’s administration; and it is long overdue. The key point here is “individualized,” with specific remedies appropriate to specific dependencies, rather than a blunt 10% on all imports.
Focusing solely on the economic arguments, however, misses that both President Biden and President Trump assert the power to impose tariffs on imports to the US without obtaining any input, let alone approval, from Congress. President Trump’s 10% proposal completely elides over this separation of powers issue.
President Biden has done the same. Both presidents have asserted that a president may, entirely on his own, impose tariffs on goods of any group of countries he chooses. In President Biden’s case, it was tariffs on imports from Belarus and Russia in response to the invasion of Ukraine. In President Trump’s case, it was tariffs imposed on steel and aluminum from Mexico in order to pressure that country to adopt the “Remain-in-Mexico” response to illegal immigration.
These might well be foreign policy goals with which we agree: but, as so often happens, power flows to the political agent most willing to use it, rather than following the currents carefully crafted by our Constitution. Article I, section 8, clause 1, gives Congress, not the President, authority to “lay and collect taxes, duties, imposts, and excises.”
Congress may delegate that authority to the President, as it eventually did regarding tariffs on imports from Russia and Belarus because of Ukraine; but the fundamental power was vested in Congress. This is precisely because of the effect of tariffs on Americans. The Constitution treated tariffs (called “duties”) and taxes in a parallel manner. The very proximity of the word “tax” and the word “duties” in the Constitution points to that.
Nothing is more clearly established in American Constitutional and history than that the framers gave to the people’s representatives in Congress, not the Executive Branch, the power of the purse, whose exercise by King George III had impelled our country to declare its independence. Good idea or bad economics, a 10% tariff is for Congress, not a newly elected President Trump, to decide.
Tom Campbell is a professor of economics and a professor of law at Chapman University. He served in the US Congress for five terms, including on the Joint Economic Committee. He is the author of “Separation of Powers in Practice,” a constitutional law text, and sued President Clinton over the undeclared war America waged against Yugoslavia.
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