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President Donald Trump arrives at Chennault International Airport on Tuesday, May 14, 2019, in Lake Charles, Louisiana.

Grace Notes: On tariffs, John Kennedy finds himself on the same page as...Chuck Schumer?

It appears that Louisiana's economy has dodged the bullet for the moment, of damages from the threatened tariffs against Mexico, which if implemented on Trump's next crisis-de-jour carries great risks to our state's economy. As reported by The Advocate on May 31, “Louisiana's exporters are already coping with a full-blown trade war between the U.S. and China. But the Trump administration's latest tariff measures mean they now also face a looming threat of a trade fight with Mexico this summer. At risk is more than $11 billion of trade between Louisiana and Mexico, mostly involving crude oil and petroleum products,” not to mention even greater impact if Mexico were to retaliate with tariffs of its own. That article also reported estimates of 65,000 Louisiana jobs at stake.

Why another threat looms for Louisiana exporters if Mexico spat escalates

The U.S. Constitution vests tariff powers in the Congress, but over the years that branch of government has relinquished much of its power in this area to the executive branch. Of particular note for the threatened Mexico tariffs is delegation under the International Emergency Economic Powers Act of 1977 (IEEPA), cited by Trump in his statement announcing his tariff threat, even though that statute has never before been used to impose tariffs. Other congressional surrenders of its tariff powers to the executive include Section 232 of the Trade Expansion Act of 1962, which Trump relied on for imposing steel and aluminum tariffs in March of last year, as well as looming threats of tariffs on autos and auto parts; and Section 301 of the Trade Act of 1974, which was the basis cited for the China tariffs.

There is bipartisan legislation pending before Congress that has the potential to remedy this problem. It is titled The Bicameral Congressional Trade Authority Act of 2019 and has been introduced as S 287 and HR 940. I say it has the potential to remedy the problem because as written it only addresses tariffs under Section 232 of the Trade Expansion Act. It needs to be expanded to also address actions under the International Emergency Economic Powers Act and the Trade Act of 1974, as well as many other delegations of tariff and other emergency declaration powers from the Congress to the executive branch.

Lang Baker

retired

Baton Rouge