Author:Mehaylo, Jessica A.

"The winds and waters of commerce carry opportunities that help nations grow and bring citizens of the world closer together. Put simply, increased trade spells more jobs, higher earnings, better products, less inflation, and cooperation over confrontation. The freer the flow of world trade, the stronger the tides for economic progress and peace among nations." (1)


    International trade is economic transacting that involves the exchange of goods and services across international borders and territories "for the purpose of providing a nation with [the] commodities it lacks in exchange for those that it produces in abundance." (2) The concept of freely sharing the fruits of one's labor in exchange for the products of another enables countries to efficiently utilize global resources to produce goods and services which fuels active competition and innovation. (3) This ideology allows "individuals and businesses to take advantage of lower prices and increased choice" supporting strong economic growth in market systems. (4) It also gives "individuals[] [the] freedom to decide how to spend and invest their money," which provides people with opportunities to achieve financial freedom and economic prosperity. (5) It is this concept in which the United States' economy was founded and expanded upon. (6)

    Since international trade is an "inevitable part of the world," it "is regularly the subject of contentious debate both on Capitol Hill and in the media." (7) With the arrival of the Trump administration in 2017, there has been no indication that the discussion on international trade will lose momentum anytime soon. (8) The Trump administration assumed an aggressive approach on international relations relying heavily on tariffs and sanctions to bolster the President's targeted trade agenda. (9) Some contend "[t]his, in itself, is not unusual." (10) It is undeniable that previous government administrations imposed financial penalties on members of the international trading community in furtherance of their trade policies. (11) However, the approach being utilized by the Trump administration is unparalleled in comparison to past administrations. (12)

    Unlike any other administration, the Trump administration has exploited the tools of international trade "in a much more forceful and much more coordinated fashion than any president in the past." (13) The administrations' far-reaching use of national security, ever-growing list of blacklisted foreign entities, and continuing pressure to change trade agreements has fueled the frustration of allied nations and lawmakers, as well as generated uncertainty for industries "in a way [which] could eventually backfire on Washington." (14) Through the weaponization of international commerce, the administration has blurred the line between its trade and foreign policy, inciting an unstable precedent. (15) By promising better trade agreements in the absence of deal negotiations, the administration has caused a tumult of confusion making it nearly indiscernible whether this is a promising plan or protectionism in plain-view. (16)

    This Note will seek to explore the Trump administrations' trade policies by analyzing their agenda and the outcomes of their policies. (17) Through historical and factual analysis, this Note will study similar strategies by past administrations and will offer distinctions between the positive and negative aspects of imposing such plans. (18) By examining the resulting civil suits and constitutionality issues, this Note will explore the reactions of U.S. institutions, as well as the probing political resistance. (19) By surveying datasets, this Note will identify the present and impending implications that such approach is having on the U.S. economy. (20) Through review of international trading powers responses, this Note will reveal the backlash from longstanding trade partners. (21) Prior to analyzing the state of the current trade climate, it is necessary to understand the relevant historical backdrop concerning taxation and international trade, as well as the constitutional framework surrounding the authority to tax. (22)


    The historical background surrounding U.S. trade exhibits a prevailing belief in isolationist policies with protectionism as America's apparent de facto policy, which started with the passage of the Tariff of 1816. (23) Despite the infant-nation's strong opposition to taxation as one of the principle driving forces behind the American Revolution, rapid industrialization and an increase in the country's scope and size led the government to turn to tariffs for relief. (24) Waves of harsh tariffs plagued the U.S. in the early 19th century, leading to an "inevitable ... tariff conflict ... along North-South lines," which occurred as a result of the negative impact of the tariffs on southern farmers. (25) The electorate "largely fed up with protectionism" ousted the then-republican President [ADD NAME], who was known for championing protectionism, by electing [ADD NAME], a democrat, who in response cut tariffs. (26) Low-tariff policies remained in effect up to the Civil War until "another swing of ... protectionism" hit the country in the midst of another industrial revolution and another republican-presidency. (27) Up until World War II, "tariffs remained ... central to American Economic policy," resulting in the most notoriously condemned protectionist measure in U.S. history, the Smoot-Hawley Act. (28) The Smoot-Hawley Act sought to improve the conditions of American farmers struggling with competitors and declining prices resulting from the stock market crash. (29) Its implementation resulted in retaliatory measures by foreign nations, who increased tariffs on U.S. products, which incited a trade war with overseas competitors. (30) In response to the retaliation, which caused a drastic decline in international trade, President Franklin D. Roosevelt decreased the amount of excessive tariffs by passing the Reciprocal Trade Agreements Act of 1934. (31) This Act was the beginning of a legislative trend granting the president certain powers in the realm of trade tariffs. (32) This Act also enabled the U.S. to distance itself from past international trade procedures. (33)

    A shift toward freer trade occurred due to the technological advances of the mid-20th century, which eased the swift progression of industry, and the "battle of capitalism vs. communism" during the Cold War, which encouraged "America to extend its hand to allies[.]" (34) By the 1980s, the U.S. had completely abandoned protectionism for plans aimed at lowering trade barriers. (35) The once staunchly protectionist republican party abandoned its "shield the industry" position, which reestablished republicans as the party of free trade. (36) Over the years, the U.S. has made great strides to promote free trade through policies and agreements, such as the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA). (37) While past administrations have attempted to improve access to products and safeguard against unequal and unprofitable prices, the current administration has chosen a different path. (38)

  3. FACTS

    A tariff is a tax imposed on a particular imported good; a tariff aims to protect domestic industry by making a foreign good more expensive. (39) The framers of the Constitution granted Congress the power to impose tariffs through Article 1, Section 8, Clause 1 (the "Taxing and Spending Clause"). (40) Through the Taxing and Spending Clause, the framers delegated the authority "[t]o lay and collect Taxes, Duties, Imposts and Excises" and "[t]o regulate Commerce with foreign Nations" to the legislative branch. (41) The Taxing and Spending Clause authorized the central government to generate revenue through taxes and control trade with foreign nations. (42)

    Under the Constitution, Congress reserves the exclusive authority to (1) impose financial penalties in the form of tariffs, and (2) regulate commerce. (43) The Taxing and Spending Clause expressly grants Congress direct control over the aforesaid enumerated powers with the authority to levy taxes remaining one of its broadest and most significant powers. (44) Accordingly, Congress plays a significant role in controlling trade and shaping economic policy. (45) The Constitution does not expressly provide the president with the authority to modify or impose tariffs. (46) Therefore, the president must rely on statutes passed by Congress to impose tariffs. (47) Policy changes in recent decades show that Congress has entrusted the executive branch with greater authority by delegating powers to the president that he does not possess through the express language of the Constitution. (48) Power over international trade is one of the delegated powers. (49)

    Prior to the mid-1930s, the federal government was primarily responsible for regulating tariff rates. (50) In 1934, however, the Reciprocal Tariff Act initiated a snowball of legislation expanding presidential authority. (51) The Trade Expansion Act of 1962 was enacted as part of the legislation stemming from the Reciprocal Tariff Act. (52) While the Reciprocal Tariff Act granted the president the authority to negotiate unprecedented cuts to tariffs and initiate a series of trade agreements, most importantly, it authorized the president, through section 232 of the Trade Expansion Act ("section 232"), to impose tariffs on the grounds of national security grounds. (53) Despite its "fundamental shift away from the ... protectionist posture[,]" section 232 has recently been utilized to impose unprecedented tariffs intended to protect American industry. (54)

    Protectionism encompasses governmental actions and policies that intend to benefit the domestic economy by restricting trade through taxation of foreign goods and/or competitors. (55) Historically, this ideology has emerged from the need to protect local industries and jobs...

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