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Trump would get expanded tariff powers under new draft bill

Shawn Donnan and Jenny Leonard, Bloomberg News on

Published in Political News

WASHINGTON -- President Donald Trump would gain line-by-line power to raise tariffs on individual products if trading partners charge higher import taxes under legislation being mulled by the White House, a move that threatens to unwind decades of global agreements.

The draft "United States Reciprocal Trade Act", which some within the White House would like Trump to unveil in his State of the Union address this month, faces an uphill battle in Congress: Republicans and Democrats have been exploring how to restrain Trump's tariff powers rather than extending them.

Since Bloomberg first reported the White House plans earlier this week, Senate Finance Committee Chairman Charles Grassley of Iowa and other prominent lawmakers have ruled out the possibility that Trump would be granted more unilateral power to impose tariffs on U.S. trading partners.

But the draft bill highlights how even as Trump and his aides are seeking to calm nervous financial markets by talking up the prospects of a resolution to the president's trade war with China, hawks in the administration continue to look for ways to open new fronts.

According to the draft obtained by Bloomberg, the bill would allow Trump to impose tariffs on products "if the president determines" that either tariff or non-tariff barriers on that product are higher than the U.S.'s. It would call for negotiations with other countries and for Congress to be notified -- but it would give lawmakers no power to vote on any tariff move.

"The lack of reciprocity in tariff levels and disproportionate use of non-tariff barriers by United States trading partners facilitates foreign imports, discourages United States exports, and puts United States producers, farmers, and workers at a competitive disadvantage," the draft measure says. That lack of reciprocity also "contributes to the large and growing United States trade deficit in goods, which is a drag on economic growth and undermines economic prosperity."

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"Oh, we aren't going to give him any greater authority, we've already delegated too much," Grassley told reporters on Wednesday in response to a question on the Bloomberg News report, adding that his view on tariffs "is a little bit different than the president's."

Global System

The U.S. now has the authority to unilaterally increase tariffs on individual products that it finds are being dumped, or imported below cost, into the U.S. Trump has also used previously dormant trade laws to impose tariffs on steel and aluminum in the name of protecting national security, and to target China over its alleged theft of intellectual property.

But the U.S. was one of the architects of the General Agreement on Tariffs and Trade and its successor, the World Trade Organization, which together for decades have governed how members can levy import taxes.

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