Former President Trump has made tariffs the centerpiece of his campaign’s economic agenda. Vice President Harris’s team has been attacking Trump’s plan, even though the Biden-Harris administration has largely carried on Trump’s trade war and her platform makes no mention of reversing course.
Americans should be worried about the dangers of another Trump trade war and that a Harris administration would not seek to undo the damages of the first one. But instead of wishing for presidential hopefuls to change course, voters should ask their congressional candidates what their plan is to stop these catastrophic tax hikes.
Congress has the power to stop this trade war, and for the sake of our economy, they should.
Congress used to stand up to presidents in the face of protectionism — even if that meant a majority party had to buck its own president.
In 1980, in an effort to reduce American energy consumption, President Jimmy Carter used Section 232 of the Trade Expansion Act to impose a tariff on imported oil. Acting outside of Congress, Carter initiated the tax hike on foreign petroleum under the legal guise of stopping threats to our national security, the same justification Trump used to impose tariffs on steel and aluminum.
But where the more recent Congress stood still against Trump’s executive orders, the Democrat-controlled Washington of the early 1980s was not buying Carter’s argument. Sen. Dale Bumpers (D-Ark.) said of Carter’s tariff: “It makes no economic sense, it makes no social sense, it makes no energy sense.” Even then-Rep. Edward J. Markey (D-Mass.), who today is a senator and bills himself as a “champion” against foreign oil, opposed the measure.
The pushback proved an embarrassment for Carter. In the House, 193 Democrats joined Republicans to reverse the executive order. In the Senate, a veto-proof majority of 67 members voted against Carter. And this all occurred in the middle of an election year, no less.
Trade laws have not changed substantially in recent decades. If Congress wants to undo tariffs it doesn’t like, it can.
As Trump’s rhetoric heats up and he threatens to implement tariffs at Great Depression-era levels, workers should ask their congressional candidates if they’re willing to stand up to whoever is in the Oval Office next year and say enough is enough. Because Trump’s first trade war has proven that tariffs are harmful, paid almost entirely by Americans and fail to meet their proponents’ objectives.
As of March 2024, the trade war tariffs had generated more than $233 billion of tax revenue for the U.S. government. That $233 billion has not come from China or other countries — it has been paid directly by American importers and consumers. On average, trade war tariffs have directly increased tax collections by $200 to $300 annually per U.S. household.
Some would argue that $300 a year is a small price to pay for increased security or more jobs. But that is not what happened following the trade war.
The tariffs have led to more job and production losses in downstream industries (e.g., steel consumers like construction and equipment manufacturers) than gains in protected industries. They have had little to no impact on the trade deficit. They invited foreign retaliation that harmed American ag producers. And the American heartland has had to bear the brunt of the damage of these tax hikes.
The trade war has not been good for the economy. A continuation or escalation of it by either party will be felt by all Americans through higher prices, fewer jobs and a weaker economy.
If Trump’s 2024 campaign tariff promises were to become law, Tax Foundation modeling finds his tariffs would shrink long-run GDP by 1.3 percent, the capital stock by 1 percent and employment by more than 1 million jobs. Foreign retaliation to the tariffs would worsen the situation, further reducing GDP by 0.4 percent with an additional 362,000 jobs lost.
While our politics have changed since the Carter administration, our Constitution has not. Congress has the power to stop this trade war, no matter the president. The question is whether enough leaders in Congress are willing to stand up to protectionism or if everyone is perfectly happy deferring to calamitous policies.
The 1980s are calling. Congress should answer.
Daniel Bunn is president and CEO of the Tax Foundation in Washington, D.C.
