Why Is the President, Not Congress, in Charge of Tariffs?

Hint: It has to do with tomatoes.

By , a professor of history and public affairs at Princeton University.

U.S. President Donald Trump, who once called himself a “tariff man,” is making clear that his love of import duties is more than words on a social media post. The announcement last week that he was following through on his threat to place steep tariffs on China as well as two major trading partners—Canada and Mexico—unsettled financial markets and global leaders.

“We don’t want to be here,” said Canadian Prime Minister Justin Trudeau, who warned Americans that there would be countermeasures that would make them feel pain in their pocketbooks and at the workplace. As stocks plummeted 600 points on Monday due to fears of trade wars, the United States and Mexico announced a one-month pause as they tried to work out a deal. Later in day, Canada announced the same.

U.S. President Donald Trump, who once called himself a “tariff man,” is making clear that his love of import duties is more than words on a social media post. The announcement last week that he was following through on his threat to place steep tariffs on China as well as two major trading partners—Canada and Mexico—unsettled financial markets and global leaders.

“We don’t want to be here,” said Canadian Prime Minister Justin Trudeau, who warned Americans that there would be countermeasures that would make them feel pain in their pocketbooks and at the workplace. As stocks plummeted 600 points on Monday due to fears of trade wars, the United States and Mexico announced a one-month pause as they tried to work out a deal. Later in day, Canada announced the same.

Whatever happens with this round of tariff threats—as there are sure to be many more—all of this begs the question: How did presidents obtain so much power over tariffs?

This is not just a story about Trump. It is a story about presidential power. Under the U.S. Constitution, Congress maintains clear authority over taxes and foreign commerce, the twin issues that define tariffs. What allows Trump to take such an aggressive action without appearing to have to worry about Capitol Hill or the courts? Who vested so much authority in the  commander in chief to impact international trade relations?

Within a nation that continues to venerate the balance of power as a founding principle in school textbooks, Trump’s threatened trade wars offer an ongoing reminder as to how much power Congress has delegated to the executive branch.

And the possibilities for what the occupant of the Oval Office can do are enormous and sometimes terrifying in scale and scope.

Presidential dominance over tariff policy was not always the way that things were.

From the founding era through the New Deal, Congress maintained tight control over determining when tariffs would be imposed. Congress exercised its authority during the high mark of protectionism. The Treasury Department depended on revenue drawn from tariffs as the principal source for funding the federal government for much of the 19th century.

Indeed, the first major legislation that President George Washington signed into law in 1789 was the Tariff Act. In 1824, Sen. Henry Clay of Kentucky campaigned for president touting a plan, the American System, that would raise tariffs on imported goods to pay for vast internal improvements. He did not win, but his vision was triumphant for decades to come.

During the post-Civil War period, when southern agriculture—the main source of opposition to tariffs—had imploded, Republicans pushed forward a sweeping new round of tariffs to continue raising funds and protecting the burgeoning manufacturing sector.

As chairman of the House Ways and Means Committee, Ohio Rep. William McKinley emerged as the chief proponent of this policy agenda. He was a driving force behind the Tariff Act of 1883 (which was the reason that tomatoes became legally classified as vegetables rather than fruits, a result of a court decision as to whether they should be taxed under the law). While president of the United States from 1897 until his assassination in 1901—as Trump loves to remind supporters—McKinley remained a champion of protectionism. Nonetheless, Congress remained the driving force throughout the early twentieth century on decisions about tariffs.

There was a brief moment when it seemed as if the era of high tariffs might come to an end. During President William Howard Taft’s term from 1909 to 1913, the Republican Party divided over the issue. With Taft pitting himself in the center, stalwart Republicans such as House Speaker Joe Cannon of Illinois continued to call for more protection, while progressives such as Robert LaFollette of Wisconsin wanted to cut them. The passage of a federal income tax system in 1913, moreover, diminished the need for this revenue stream. President Woodrow Wilson, a Democrat, signed the Underwood-Simmons Tariff Act into law. It dramatically cut tariffs down to about 27 percent.

Yet protectionism survived, even though congressional control over policy started to slip away. In 1930, Congress passed the Smoot-Hawley Tariff Act, which raised tariffs on tens of thousands of goods. Legislators hoped to protect struggling farmers. Instead, they triggered a devastating trade war as the global economy slipped deeper into a major economic depression.

A shift in institutional power within Washington occurred. Elected in 1932, Democratic President Franklin Delano Roosevelt was in the White House and determined to save the national economy and its democracy. In the aftermath of Smoot-Hawley, Roosevelt pushed for a new era of trade relations that would revolve around reciprocal agreements between nations. In 1934, after months of intense wrangling, Congress passed the Reciprocal Trade Agreements Act.

At the heart of the legislation, Congress began the process of granting the president more power over trade policy. The law authorized the president to negotiate bilateral, reciprocal agreements and to adjust tariffs up to 50 percent without congressional approval. The decisions could be implemented through executive orders. Republican opponents warned that the bill delegated excessive power to the president.

But FDR’s opponents were overwhelmed at a moment when Smoot-Hawley had cast a dark shadow over Capitol Hill, and economic conditions were so dire that the nation demanded bold action. Secretary of State Cordell Hull, who had been the crucial proponent of the Reciprocal Trade Agreements Act, boasted to the press that it would return the nation to “permanent prosperity,” and he urged the world to take a “broad view of enlightened self-interest.”

The 1947 General Agreement on Tariffs and Trade, a legal agreement between multiple nations promoting free trade, provided a governing body outside of Congress through which presidents could reach and justify positions.

In 1962, as the Cold War between the United States and Soviet Union raged, Congress passed the Trade Expansion Act, which further expanded the power of the president to enter into trade agreements and adjust rates. Section 202 granted presidents the ability to unilaterally reduce tariffs that were less than 5 percent. Under the guise of national security, Section 232 granted presidents the ability to restrict imports that threatened national security, language that was vague enough to be used in a wide variety of circumstances. The U.S. trade representative would be established as an administrative body within the executive branch that took over more responsibilities from Congress.

President John F. Kennedy had pushed hard for the measure, frustrated that it took more than seven months to work through the legislative process. During an August news conference, he called it the “most important measure to be considered by many a Congress”; earlier in the year, he had warned, “ If we cannot make new trade bargains with the Common Market in the coming year, our export surplus will decline, more plants will move to Europe, and the flow of gold away from these shores will become more intensified.”

Most legislators assumed that the president would handle that power responsibly, invoking the authority when there was a clear necessity to do so. Once the president signed the bill into law, Kennedy proclaimed that it marked the most important piece of international legislation “affecting economics since the passage of the Marshall Plan.” He claimed that it was a “decisive point” for the economy.

The presidential-centered free trade regime continued. Even as Congress moved to restrain the imperial presidency in the aftermath of the Vietnam War and Watergate, international trade relations proved to be one realm that remained generally free from scrutiny. President Gerald Ford signed the Trade Act of 1974, which enabled him to cut certain existing tariffs by up to 60 percent; he could also raise existing rates by upward of 20 percent. The legislation granted the president fast-track authority to negotiate agreements. While Congress did assert its right to approve or reject the measures, the legislative branch could not amend the agreements or filibuster them.

The legislation, Ford promised upon signing the bill, “allows us to act quickly and to effectively counter foreign import actions which unfairly place American labor and industry at a disadvantage in the world market.” The goal of the measure, which marked the culmination of the era that started with FDR, was to enable the president to ensure the survival of a world system of global free trade. In 1979, Congress extended the fast-track through the Trade Agreements Act and then again with the Omnibus Trade and Competitiveness Act of 1988.

To be sure, there were moments when observers wondered if the United States would move back to an era of protectionism. On Aug. 15, 1971, President Richard Nixon called for an import surtax of 10 percent across trading partners, saying that, “when the unfair treatment is ended, the import tax will end as well.” He instituted the tax through executive order, but lasted less than half a year.

During the early 1980s, with fury about Japan and West German competition reached a crescendo, it seemed possible that President Ronald Reagan would slap tariffs on competitors who were seen as driving the United States into its deep recession. Yet he didn’t end up budging from the trade regime that he inherited. During his second term, Reagan championed the bipartisan consensus over free trade and used the power of his office to impede any opponents who wanted to close the world’s economic doors.

As the Cold War dwindled toward the close of his second term, Reagan stood at the precipice of period in U.S. history where free trade would be seen as the binding force in a democratic, noncommunist world. The creation of the World Trade Organization in 1995 established a forum for curtailing additional trade barriers as well as for the enforcement of trade rules. Within the United States, trade and tariff policy remained under the realm of the presidency.

Additional developments, such as the expansion of trade executive agreements made by the president and U.S. trade representative outside the treaty process, without legislative approval, have further eroded the influence of the House and Senate.

And regardless of the back-and-forth over trade, respect for presidential power has remained solid as stone.

Support for free trade has eroded since the administration President Bill Clinton. Grassroots protests against the principle erupted during the 1990s as progressives came to see free trade agreements as the source of growing inequality and economic insecurity. President Barack Obama imposed tariffs on Chinese firms. In his first term, Trump also used tariffs on China as well as several other countries.

But the current initiative is more sweeping. At the start of his second term, Trump is threatening to end the era of free trade and start a new period marked by protectionism and ongoing trade wars.

His opponents are learning the cost of the century-long romance with presidential power, which has only occasionally been broken at moments such as the Watergate scandal. Whereas presidential power seems efficient and effective when used to support policy goals that one favors, that same force can feel like an unaccountable battering ram when turned in a different direction.

With tariffs, along with other brazen assertions of executive power, it’s starting to feel a lot like the early 1970s as American eyes open to the immense powers of the presidency.

Julian E. Zelizer is a professor of history and public affairs at Princeton University. His new book, In Defense of Partisanship, is published with Columbia Global Reports. X: @julianzelizer

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