Trump's power play on tariffs cuts out Congress — but lawmakers could stop it if they wanted to

Key Points
  • President Trump will enact steel and aluminum tariffs by the end of the week, the White House says.
  • The Trump administration is using a law not successfully applied in more than two decades that gives Congress less power over the policy.
  • Congress could only stop the tariffs through a vote with a veto-proof majority.
President Donald Trump speaks during a meeting with leaders of the steel industry at the White House March 1, 2018 in Washington, DC.
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To implement new taxes on imports of steel and aluminum, President Donald Trump is relying on a law last applied in the early 1990s.

The law – specifically, Section 232 of the Trade Expansion Act of 1962 – allows the president to bypass Congress and impose tariffs by executive order.

In this case, Trump made his determination on Thursday, announcing with little prior indication at a White House meeting that his administration would impose tariffs of 25 percent on steel and 10 percent on aluminum.

The legal justification for the tariffs came in the form of a report from Commerce Secretary Wilbur Ross, which outlined the national security threats from the imports in question and provided a framework for retaliation.

Ross' report originally suggested a 24 percent tariff on steel; Trump nudged it up to 25 percent.

"Your guess is as good as mine" for why Trump increased the number, said Edward Alden, a senior fellow at the Council on Foreign Relations, a nonpartisan think tank. "Twenty-five sounds better, probably."

The Commerce Department did not immediately respond to CNBC's request for comment.

Executive tariffs

President George W. Bush slapped tariffs on steel imports in 2002. But his were so-called safeguard tariffs, which require a lengthier legislative process involving the input of the International Trade Commission. He ended those tariffs in 2003.

In those days, Republicans were generally unified in their preference for free trade. And as recently as 2013, Republicans appeared to join Democrats in strongly supporting U.S. participation in a more global economy: A Pew Research poll from that year found that 74 percent of Republicans agreed that growing trade and business ties are good for the U.S.

But Trump's winning presidential campaign, during which he regularly attacked free trade agreements as "unfair," quickly buckled that consensus. By March 2016, more than two-thirds of Trump supporters said free trade agreements have been a bad thing for the U.S., according to a Pew Research poll at the time.

Republican congressional leadership, however, has been less enthusiastic to follow Trump on trade.

House Speaker Paul Ryan this week said he was "extremely worried" about the consequences of a potential trade war. And Mitch McConnell, the Senate majority leader, said he has "genuine concerns" about the policy.

On Wednesday, 107 House Republicans, including House Ways and Means Committee Chairman Kevin Brady and Trade Subcommittee Chairman Dave Reichert, sent a letter to Trump opposing broadly applied tariffs, and instead called for more targeted trade measures.

"We support your resolve to address distortions caused by China's unfair practices, and we are committed to acting with you and our trading partners on meaningful and effective action," the letter said. "But we urge you to reconsider the idea of broad tariffs to avoid unintended negative consequences to the U.S. economy and its workers."

Wall Street doesn't appear to be pining for protectionism, either. The day after Gary Cohn, Trump's top economic advisor and a free trade advocate, announced his resignation, the stock market tumbled before bouncing off its lows.

What can Congress do?

Congress has the constitutional right to regulate trade between the U.S. and foreign nations. But the law being applied here gives the executive branch a significant upper hand against the legislature, which has little recourse to challenge Trump's wishes for a more protectionist trade policy.

If Congress does want to stop the tariffs, it has essentially one option, the Council on Foreign Relations' Alden said: pass a measure with a veto-proof majority that either overturns the action or strips Trump of his authority to impose it.

But Alden said it's highly unlikely. "I would be astonished" if Republicans in Congress banded together with Democrats "to rescind a core policy of the president," he said.

The White House said it will follow through on the proposal by the end of this week, although it allowed itself some space to potentially blunt the severity of the taxes for Canada and Mexico "based on national security."

Trump administration officials say the potential downsides of the tariffs, such as higher prices on some products, will be minimal at best.

But the process being used to enact the tariffs, Alden said, is far from pedestrian.

"There's nothing normal about this at all," he said. "This is a radical departure from the norm."