On Monday, July 30th, Partnership for a Secure America held an off-the-record roundtable dinner for alumni of the Congressional Partnership Program to discuss trade, the growing use of tariffs, and the potential for a larger trade war. The conversation focused on how the U.S. and Congress can respond to help American workers without damaging relationships with allies.
Trade and Tariffs
Beginning in 2018, President Trump imposed significant tariffs on $34 billion of Chinese imports in addition to 25% tariffs on all imported aluminium and 10% tariffs on all imported steel. Both China and close trading partners such as the European Union and Canada responded swiftly, imposing their own retaliatory tariffs on a variety of American goods. The country is divided in regards to this shift in American trade policy. These divisions – unlike with many other issues – are not necessarily partisan but are based largely on the economic prospects for various industries in the context of a trade war.
Trade Expansion Act of 1962
- Section 232 of the Trade Expansion Act of 1962 gives the president the unilateral authority to alter tariff levels on certain imports if an investigation by the secretary of commerce determines that these imports threaten American national security. The Trump administration cited this law as the legal authority for the imposition of new tariffs without congressional approval.
- March 2018
- President Trump announces that his administration will impose tariffs on imported steel and aluminium. U.S. stock markets fell sharply in response with the Dow Jones industrial average dropping 420 points on the same day and the NASDAQ and S&P each dropping 1.3%.
- May 2018
- President Trump applies tariffs on steel and aluminium imports from Canada, Mexico, and the European Union. These countries had initially been exempted from these barriers.
- June 2018
- President Trump releases the final list of Chinese imports that will be targeted by 25% tariffs – a total value of approximately $34 billion in goods. China immediately responds with retaliatory tariffs.
- July 25
- President Trump meets with President of the European Commission, Jean Claude Junker to negotiate a deal to avert a trade war between the United States and the European Union. In a joint press release, the two announced they would work together to remove tariffs and other trade barriers.