Thursday, August 10, 2017

The Constitutional Irony of Trump's Steel Imports Investigation

As a constitutional matter, it is ironic that President Trump proposes to use a national security exception to impose tariffs on steel imports, tariffs that would otherwise exceed U.S. trade commitments. It’s ironic because the national security exception was enacted by Congress in order to limit the President’s authority over trade and to preserve some measure of congressional control over “Commerce with foreign Nations.” President Trump’s proposed action would accomplish the opposite.

1954: The National Security Exception Is Born

The national security exception is now in Section 232 of the Trade Expansion Act of 1962, but the exception originally appeared in a 1954 statute that had modest goals amid constitutional rumblings about trade and Executive power.

The Trade Agreements Extension Act of 1954 was intended as a placeholder, a one-year extension of presidential trade authority pending further study of the new constitutional direction that the country had taken on trade since the 1930s.

In the Tariff Act of 1930 and the Trade Agreements Act of 1934, Congress granted the President authority to enter into reciprocal trade agreements, an authority that would have expired without the 1954 Act. Originally one paragraph, the 1954 Act purported only to extend the president’s authority “pending the completion of a thorough study of the overall tariff and international trade situation,” according to the Senate Report.  

The first part of that work had been completed with the submission in January of a report by the congressionally-created Commission on Foreign Economic Policy. The House and Senate demurred that the press of other legislative priorities had precluded them from holding hearings on the report and the 1954 Act was intended as a stopgap.

Neither the bill that passed the House nor any of the amendments offered on the House floor mentioned national security. Section 2 of the Act, the precursor to current Section 232, was introduced in the Senate on June 24, 1954, by Senator Stuart Symington, a Democrat from Missouri and previously the first Secretary of the Air Force.

On the floor, Senator Symington emphasized “the harsh realities of the world in which we live – the world in which we trade and do business.” His remarks presented the amendment as a limitation on presidential power to enter into trade agreements: His amendment, he said, “in effect would require testing tariff decreases against defense requirements.” He stated his belief that “it should be mandatory for the administration to make certain that no tariff should be reduced, whenever such reduction would threaten continued domestic production necessary to meet our projected defense requirements.”

An Era of Lingering Doubts About Presidential Trade Powers

Section 232 requires that the President make a study and report to Congress (as the Trump Administration is now doing), but it does not substantively cabin the President’s discretion to invoke the national security exception. As Trump has told the press, Section 232 lets him do pretty much whatever he wants if he finds a national security threat.

This would have troubled Senator George W. Malone of Nevada. During the floor debates, Senator Malone read a lengthy statement opposing the 1954 Act extending the President’s trade authority.

Senator Malone’s opposition was expressly based on separation of powers concerns. Opening his remarks, he said, “I am opposed to the extension of the act because the Constitution of the United States, in article I, section 8, specifically provides that the Congress shall have power to lay and collect duties, imposts, and excises – we call them tariffs – and to regulate the commerce of the United States with foreign nations.”

Senator Malone objected that Congress, in the 1934 Trade Agreements Act, “yielded these responsibilities to the executive branch.” He was troubled that the President had delegated those powers to the State Department (this was prior to the creation of the Office of the United States Trade Representative). The State Department, he said, “scatters and diffuses them among foreign nations” through the GATT, “which has never been approved by Congress, and which considers itself, in fact, a creature of the United Nations.”

Senator Malone’s opposition was not just formal. In substance, his statement objected to a great number of what he viewed as the evils of the new era of trade agreements. His first objection was that, in his view, the Trade Agreements Act “retarded and weakened the nation’s defense potential.” He argued that “favoritism shown foreign producers of critical and strategic materials, minerals, and fuels” had “reduced the productive capacity of vital American defense industries, and … atrophied worker and professional skills in those industries.”

The next day, Senator Symington’s amendment was introduced, addressing at least the first of Senator Malone’s substantive concerns. Senator Malone’s separation-of-powers concerns were essentially ignored by the rest of the body.

Senator Malone lamented in 1954 that no court had ruled on the constitutionality of the new trade agreement process, and that remains true today: Only the Eleventh Circuit has been directly asked to rule on the constitutionality of modern congressional-executive agreements, and that court dismissed the issue as a non-justiciable political question. Rightly or wrongly, over the sixty-three years since Senator Malone voiced his lingering objections to the approach, the congressional-executive agreement has become the standard and accepted means of entering into trade agreements by the U.S.

The Irony of Grown-Up Section 232

So the precursor to Section 232 was enacted in a climate of lingering Senatorial doubt about the constitutionality of trade deals entered into by the President (instead of by Congress under the Commerce power) and approved by a simple act of Congress (instead of by two-thirds vote of the Senate as required of treaties). Section 2 of the 1954 Act was perhaps a last cursory nod in a generation of Senate acquiescence to surrendering both its Commerce Clause and its Treaty Clause powers to the President. In the early days of the Cold War, the one thing the Senate would do was to ensure that the President didn’t bargain away the country’s national security in exchange for a better trade deal. Section 2 (now Section 232) was designed to do that.

The irony of President Trump’s steel imports investigation is that his use of Section 232 would expand rather than constrain Presidential power in the trade realm. Unlike the GATT, which (as Senator Malone pointed out) had not been submitted for congressional approval in 1954, the trade obligations that Trump seeks to deviate from have been implemented into U.S. law by Congress. The Uruguay Round Agreements Act in 1994 approved the WTO Agreements (including the GATT) and made their obligations a part of U.S. domestic law. The NAFTA Implementation Act of 1993 did the same for NAFTA. Those acts were passed by both houses of Congress and were signed into law by the President like ordinary legislation. Now Trump wants to back out of them (or parts of them, at least). 

The Way Forward for a Nervous Congress

That’s not to say that President Trump’s proposed use of Section 232 to limit steel imports would be unconstitutional. Congress wrote Section 232 broadly and, aside from procedural requirements, gave the President broad discretion.

Not unconstitutional, but ironic. A statute originally passed to allow Congress to keep a bit of an eye on Presidential trade authority may now be used to derogate from trade obligations that Congress has implemented through legislation.

If the Administration’s trade agenda is making Members of Congress nervous, they should revisit Section 232 and other trade acts that give the President broad authority and consider articulating more intelligible principles for how that discretion may be used.

http://lawprofessors.typepad.com/inttradelaw/2017/08/the-constitutional-irony-of-trump-steel-imports-investigation.html

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