Does Trump have the authority to create tariffs on imported goods, and if so, should he?
President Trump’s recent tariff proposal is both ill conceived and illegal. Section 8 of the constitution gives the sole power to establish taxes, excises and duties to the legislative branch. A tariff is a duty or tax that is applied to the consumers of that country, meaning Americans. Before the creation of the income tax, the federal government actually used to fund itself primarily through tariffs, and actually pushed for the creation of the income tax in order to get rid of tariffs.
But that’s not the point. It is illegal for the president to apply taxes on the American people. Its a very big power/responsibility, as it affects our economy and way of life. The federal government claims it is legal through a law passed in 1962 called the Trade Expansion Act. Sect 232 of this act gives the power to apply tariffs to the president, in events of national security (a favorite buzz word when violating the constitution). Obviously, there is no justification for these tariffs and by the law used to invoke them, they are illegal. However, the Trade Expansion Act is illegal in and of itself, as changes section 8 should require an amendment to the constitution. This is yet another example fo your government operating as a rogue agency.
Why are tariffs bad? Well, they tend to simply raise the cost on Americans, while having no real effect on imports. It lets American companies off the hook for having to compete with prices from other countries. Meaning, it doesn’t curb the purchase of lower priced goods, as the American companies raise their prices in response to the tariff. So, the cost of foreign and domestic products go up. Sure, American companies make more money, but the cost of everything rises as a result, and the consumer pays more for things they are already having a hard time affording.
Secondly, when applied to raw materials, everything that uses those materials are negatively impacted. LG doesn’t have to pay tariffs on the steel/aluminum they use on their products, but Maytag will (because again, prices just jumped in America). So, the cost of their machines, the parts in the machines, etc. will all increase, passing the increase off to the consumer in the price tag. So, LG can advertise a lower price and out compete Maytag as a result. We are trading steel jobs for manufacturing jobs, and there are a lot more manufacturing jobs out there.
Overall, President Trump’s tariffs are illegal and are poorly thought out.