Lawmakers brace for Trump’s next move on auto tariffs

Lawmakers from both parties are bracing for a final report from President Donald Trump’s Department of Commerce on whether imports of automobiles and auto parts threaten national security.

The findings and recommendations of the probe launched last May are due by February 17, but they could be sent to the White House as soon as Friday — although the administration may choose not to make the document public right away. Trump, who has threatened to slap tariffs of up to 25% on cars coming from Europe and elsewhere, will have 90 days to decide how to proceed, but he could act at any point once he receives the report.

Senate Finance Committee Chairman Chuck Grassley warned Trump against pursuing tariffs in a floor speech Thursday, pointing to the potential for lost jobs and price increases for American consumers.

“I agree with the President that we must have fair and enforceable trade agreements that benefit Americans,” said the Iowa Republican. “Sometimes we have to make hard decisions in order to get there. But I do not agree that we should alienate our allies or jeopardize the health of our own economy to achieve good outcomes.”

Trump used the same Cold War-era authority last spring to impose tariffs of 25% and 10% on foreign steel and aluminum, claiming they would act as a useful negotiating tool in various trade negotiations. A bipartisan group of legislators argues Trump has abused the national security purpose of the provision, applying it to imports that don’t actually represent a threat.

A bill recently introduced by Pennsylvania Republican Sen. Pat Toomey would require congressional approval for past and future national security trade restrictions and would place the Defense Department rather than the Department of Commerce in charge of investigations conducted under Section 232 of the 1962 Trade Expansion Act. It would also make moves to limit the scope of the power by providing a definition of “national security” and limiting the goods that can be considered under the law to those related to military equipment, energy resources, and critical infrastructure.

The measure has found allies among Democrats in the House, where members are looking for ways to rein in Trump’s power.

“The President shouldn’t just have the unilateral ability to declare a trade war. Those were provisions for extraordinary circumstances and we’ve seen the executive branch abuse those,” California Democratic Rep. Ro Khanna told CNN, saying he was open to supporting Toomey’s bill.

House Speaker Nancy Pelosi said in a recent press conference that she had not yet read the House version of Toomey’s legislation, “but I do support reclaiming some of Congress’ — it is Congress’ prerogative.” Her comments came as Grassley has signaled his intent to address the issue in the Senate. He told reporters during a press conference Wednesday that his staff was working towards a compromise that would address the matter, although he maintained it was unrelated to Trump’s actions.

“Our moving on 232 has nothing to do with autos or aluminum or steel,” said Grassley. “It comes from the proposition that Congress in 1962 delegated too much constitutional authority to the president.”

Virginia Democratic Rep. Don Beyer — a free-trade voice on the House Ways and Means committee who is one of seven Democratic cosponsors of the lower chamber’s version of Toomey’s bill — argued Trump’s looming threat to impose auto tariffs could spur action from a Congress that has been reluctant to confront him on the issue.

“I don’t think there’s any greater fear right now than the notion of applying 232 tariffs to cars and what that would mean in terms of disrupting consumer markets and disrupting the livelihoods of hundreds of thousands of people,” said Beyer.

A July 2018 study from the Center for Automotive Research examined four different tariff strategies the Trump administration could pursue, including the most drastic scenario of 25% duties across the board on all auto and auto parts imports; 25% but with exemptions for Canada and Mexico; 10% tariffs across the board; and 10% with exemptions for Canada and Mexico.

The study found that the lowest-impact scenario (10% tariffs with exemptions for NAFTA members) would lead to an estimated $980 increase in the average consumer price of vehicles sold in the United States, whereas the most severe option (25% universally) would cause average consumer prices to go up by $4,400. It also estimated revenue losses ranging from $16.3 billion to $66.5 billion.

Beyer sounded optimistic about winning support among his colleagues. “If it’s the right thing to do and we have enough votes and the will of the leadership to pass it, then we’re going to pass it,” he said.

But he is willing to consider alternatives, such as a bill introduced by Ohio Republican Sen. Rob Portman, a measure Grassley has heralded as a good starting point.

Portman’s more scaled-back approach would shift power to the Defense Department and allow Congress to disapprove of tariffs after implementation, but it would not repeal Trump’s existing steel and aluminum tariffs.

“It’s weaker than ours, but sometimes politics is the art of the possible,” Beyer said. “If ours dies and theirs lives, I think we would move forward on that. But we shouldn’t start there.”