Trump’s Tariff Superpowers

After the last few days one would think there would be a lot more alarm bells going off in national media, but I guess I shouldn’t be surprised. Peter Baker at the New York Times:

In the space of a few hours, he declared that his own central bank chief was an “enemy,” claimed sweeping powers not explicitly envisioned by the Constitution to “order” American businesses to leave China and, when stock markets predictably tumbled, made a joke of it.

Mr. Trump’s wild and unscripted pronouncements on Friday renewed questions about his stewardship of the world’s largest economy even as he escalated a trade war with China before heading to France for a high-profile summit with the leaders of many of the world’s other major industrial powers.

“Renewed questions” about his stewardship of the ecocnomy? Renewed questions? Your bleeping hair should be on fire, you dweeb.

The best analysis of the past couple of days I’ve seen so far comes from Josh Barro, a one-time Republican who still calls himself a neoliberal. But putting that aside, “This Is How Trump Will Tank the Economy and His Presidency” sounds about right to me.

If he wanted less China-related economic drag, he could back off the tariff threats. And indeed, he did a little of that a couple of weeks ago, delaying some of the new tariffs he announced for September 1 so they won’t take effect until December 15. His administration said this delay was for national security reasons, though he said himself it was because he didn’t want to interfere with the Christmas shopping season.

But the Chinese appear to have read the delay as a sign of weakness. This week they announced more tariffs, infuriating the president. Since backing off didn’t work, he decided to escalate today. And that’s what’s so nerve-racking for the markets: His trade policy no longer appears to be self-limiting. In fact, it could be self-reinforcing, where tariffs cause damage and the president tries to “fix” the damage with more tariffs. …

…With a China less willing to back down and a trade war maybe too far along to stop, the president is backed into a corner. He may feel he can’t save the economy by folding. And so he may follow his instinct — one of the few consistent policy views he has expressed for decades — that protectionism is good for the economy, and that despite what the markets and his advisers are telling him, trade wars are good and easy to win and more tariffs and more disruption will only mean more winning for the U.S.

What the president showed us today is he’s prepared to hit the gas as he approaches the cliff.

I don’t see any way that won’t happen as long as Trump is in the White House. Near term, the money people may still keep the stock market, and Trump, propped up, but we’ll see what happens with the markets on Monday.

Trump keeps demanding that the Fed drop interest rates to goose the economy he’s killing with his tariffs. Whether dropping interest rates would do as much for the economy as Trump thinks is questionable. But see also Trump’s company could save millions if interest rates fall as he demands.

Another thing that irritates the hell out of me is that the teevee bobbleheads keep saying that of course a president has the power to enact any tariffs he wants to, without congressional approval. Except he doesn’t, or at least he’s not supposed to. The Constitution plainly gives Congress and only Congress the power to levy tariffs in Article I, Section 8, first paragraph, where it says “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.” In 18th century language tariffs come under “duties” and “imposts.” 

At article published at Vox last year explained how Congress has been ceding trade regulation powers to Congress for decades through a number of bills that give presidents tariff powers under particular circumstances that can be stretched to fit just about any occasion. Trump shows us why that was a bad idea. But today he specifically mentioned one instrument of that congressional power shift  —

The full title of the bill is International Emergency Economic Powers Act of 1977, known as IEEPA for short. Trump seems to think this bill gives him complete control over how American businesses work with China. Per Anya van Wagtendonk at Vox: Um, no.

The Economic Powers Act allows the president of the United States to regulate commerce during a national emergency. It does not allow a president to order companies to close their factories in foreign countries, however. And as there has not yet been a national emergency declared with respect to Chinese trade, Trump’s present abilities to govern economic interactions with China are limited to measures like tariffs.

Even Wagtendonk surrenders extraconstitutional tariff powers to Trump. IMO if we ever again have a Democrat in the White House and a Democratic majority in both houses of Congress, there needs to be a great taking back of a lot of these surrendered powers, including war powers. See also this “primer” on IEEPA at Lawfare that is fairly terrifying, since it describes what a president could do under IEEPA.

And see also Trump ‘hereby’ orders U.S. business out of China. Can he do that? at WaPo. The answer is, yes and no. Trump really could do a lot of things presidents haven’t done before that could do a lot of damage, and at this point it’s clear there is nobody keeping him in check. Congress could do it, if it acted, but Mitch McConnell won’t allow that.

But the Chinese can read poll numbers and can see that Trump could be a one-term president, meaning it’s likely he’s got 17 months before he’s out. The Chinese do tend to take the long view of things. I would be enormously surprised if they blink.

13 thoughts on “Trump’s Tariff Superpowers

  1. So Trump says,,,case closed! Except there is a metaphysical dynamic that says: actions have consequences. Trump might be intoxicated with the idea that he has so much power, but if he thinks he can force his will by sheer power and without the benefit of wisdom he's headed for a disaster and he'll be taking us with him.

    Supporting scripture: "If the blind lead the blind, they both fall in a ditch."

  2. I don't travel in those circles but I would guess that CEOs have egos to match their stock option bonuses. Being ordered by The Donald to move out of China (or else) feels like the threat of a gangster. These guys aren't gonna roll over for the donald.

    Xi has, as Maha observed, decided to play the long game. Trump may be toast and it might be obvious Trump's a lame duck much sooner than November. Xi hasn't flinched over tariffs – the most recent response was, I'll see your tariff and raise you one." The order for American companies to leave China was a desperate attempt by Trump to put  pressure on Xi through the oligarchs in China who would be hurt. Xi seems to be savvy enough not to be stampeded – my guess is he'll wait to see if the threat has any substance and if the American companies would tie the order up in US courts.

    Xi has people who read English and Xi knows the threat isn't remotely real until/unless there's the declaration of an emergency. Regarding litigation, US lawyers will want to know if the US will foot the bill for shutting down in China and re-tooling in Viet Nam or wherever covering all losses in the interim. If not, the lawyers will drag the legal process out for as long as it takes Trump to lose the election.

    Frankly, I hope Trump follows through. He'll make some powerful enemies and the bottomless super-PAC companies in China might form would cream Trump. I'm curious if there has been any Libertarian response – the suggestion that corporations are satellites to the state can't go over well.


  3. You have to give it to Mayor Pete.  He makes the case for credibility and stability in Washington.  Considering the current environment is this not the sensible starting point?  Shitstorm or a Shit Cyclone, we had a week of more flip-flops, on multiple topics, than a town pancake feed.  Gone are the days when a calculated reasoned change on a political position held years in the past, constituted disqualification for political office as way too wishy-washy.   Last week we had day by day position changes on tax policy and gun control that changed like clouds in a thunderstorm.  Unstable people are sometimes described as waking up in a new world every day.  To get to this level of instability you have to wake up in a different world even after brief and multiple daily naps.  A political wind sock at the mercy of his own wind bag emulation and blow back.  It is almost the roaring twenties so flappers are coming back in aren't they?  Look for Trumps political fight song to change to the gone bananas rag.   I'm with the Mooch on this one and Mayor Pete too.

  4. Some trace the beginning of the "imperial presidency" to the creation of the Executive Office by the administration of FDR. And to be fair, the Great Depression and other world events created pressure for an expansion of the presidential staff and presidential power.

    However, that expansion is minimally related to conservatives' long march toward a king. Of course when a Democrat is president they whine piteously about the anti-Americanism of it all, but their basically authoritarian nature makes the right natural monarchists. It's been evident from Nixon's veto of the War Powers act to W. Bush's revival of fast track trade authority to the present "unitary executive" theory. Some are plain about it:

    Including on the libertarian right:

    We can hope the three ring spectacle of an idiot king will slow the momentum.

  5. We must demand the details of Trump's business dealings. How much does he owe to his creditors? Can he refinance any of his debts if he manages to drive down interest rates? He can move markets with his Tweets; is he doing so in a way that will line his pockets? The information is in his taxes and in his other business records. 

  6. Trump is the kind of idiot that would kill the golden goose just to get the eggs. He's claiming that his only regret in the trade war thus far is that he didn't make the tariffs higher.

    What do you think the chances are that China waves the white flag and says, OK, we give up? Maybe they might, but I don't think that's going to happen until Trump is reelected for a second term. And if he doesn't conclude his trade war I doubt he'll get a second term. There's an old Chinese proverb…Never surrender before you absolutely have to.

     A big bag of shit says it all. He's got no concept of human nature. He might feel superior stiffing Polish worker at his Taj Mahal or beating down undocumented workers at his golf courses, but when you're dealing with one of the oldest civilizations on the planet and the most populous country in the world, I don't suspect it will be so easy to ram shit down their throat like Trump intends to do.


    • Perfect Swami.  It seems the French are able to outmaneuver our artless misdeal expert also.  China is not the number two and gaining world economy for nothing.  They know how to be polite and humble, and do not consider such behavior as a sign of weakness.  To them Trump  is but another toad pretending to be a frog and an easy leap.  


  7. G7: trump claims to go to climate meeting but didn't.

    Trump says Melania met knows Kim Jung In. She didn't

    Trump says Chins called and they want to negotiate tariffs. They didn't call.


    Made up foreign policy trying to keep markets from tanking. Lie lie lie

    Then he decides next G7 should be at his place so his company gets the paycheck. Emoluments…

    • I think it would be less harmful to the environment if they would just contract the job of diverting hurricanes out to Pat Robertson*. Win win!

       There might be some fallout in doing that, but at least it wouldn't be radio active fallout.

      * I don't know if Pat is still doing hurricane abatements, but if he isn't, maybe his son Timmy could pick up the mantle.

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