Brooklyn Boro

Legal Lunches examines President Trump’s role in international trading

March 9, 2017 By Rob Abruzzese, Legal Editor Brooklyn Daily Eagle
Professors Julian Arato and Rebecca Kysar discussed how President Donald Trump could have legal impacts on trades, tariffs and taxes on Monday. Photo courtesy of the Brooklyn Law School.
Share this:

Brooklyn Law School continued its weekly Legal Lunches series where it examines presidential powers and the law, in Downtown Brooklyn on Monday with professors Julian Arato and Rebecca Kysar. This week’s discussion, which is free and open to the public, centered around President Donald Trump and international trading, tariffs and taxes.

Professor Kysar teaches federal income tax law, international tax and federal budget and tax legislative processes at the school. Arato’s area of expertise includes international economic law, public international law, international organizations, contracts and private law theory.

Before getting into the discussion on what Trump can or cannot do when it comes to international trade, Arato discussed free trade, who it impacts and why it can be seen as low-hanging fruit for politicians to rail against.

Subscribe to our newsletters

“The benefits of free trade are felt broadly and you don’t think that it’s free trade that makes your iPhone cheaper,” Arato said. “It’s not something that occurs to most people. Those who suffer from free trade think about it a lot. When a factory closes in Michigan and someone blames steel being brought in from other countries, you immediately think that these are the people taking my job and the government is responsible. That’s really easy to capture for a politician to stand in front of a steel mill and yell about free trade.”

Kysar then brought the discussion back to Trump and how he could implement some of his campaign promises to impose tariffs on countries that the U.S. has a trade deficit with.

“Really not since the ’30s have tariffs have been so ubiquitous in American politics,” Kysar said. “There was a time in the ’70s where Nixon proposed tariffs to deal with the deficit. The president has threatened tariffs numerous times during the campaign and over the last few months. He caused quite a stir when he said that we could tax Mexican goods at a 20 percent rate in order to finance the border wall.”

She explained how free trade has generally been embraced by both Republicans and Democrats and pointed out that House Speaker Paul Ryan has spoken out against any kind of tariffs. If Trump wants tariffs passed, he will likely have to work unilaterally without the aid of Congress, she said.

“The question becomes: Can Trump do this on his own?” Kysar asked. “I think the answer is generally no. In the Constitution, Congress has the power to levy taxes and regulate foreign commerce. There is also the Origination Clause that says that if you are going to raise taxes then you have to do so by starting in the House of Representatives. As a constitutional matter, this is clearly in the wheelhouse of Congress.”

The International Emergency Powers Act of 1977 was also discussed. The act gives the president the powers to regulate the importation of foreign property if he declares a national emergency. The problem here, Kysar explained, was that the president would be unlikely to use tariffs as a form of regulation in this case and said that nothing in history suggests that a president would be authorized to pass tariffs in this manner.

“There is also the question of how unusual the emergency has to be,” Kysar said. “The fact that we’ve had a trade deficit since the ’70s calls into question the fact that it is unusual. Today’s situation has also been a far cry from past situations where presidents have invoked this kind of emergency. The Civil War, the Korean War, the Great Depression, stagflation of the ’70s were economic circumstances that were much more dire than they are today. It’s not clear cut that Trump could use this in this matter.”

The discussion then went into temporary tariffs that the president could impose against countries with a “large and serious” trade imbalance, but those are only authorized for 150 days. Trump may also try to impose retaliatory tariffs by claiming unfair trade practices with countries. He could also ban certain items that threaten national security.

“Should we be worried about trade deficits?” Kysar asked. ”Trade deficits often increase when the economy is growing. When the economy is healthy, we see stronger consumption of imports and more international investment which leads to a trade deficit. Sometimes a strong trade deficit means that you have a strong economy, and getting rid of it could lower the standard of living within the U.S.”

 


Leave a Comment


Leave a Comment