Why did congressional Republicans vote for a federal tax cut? Spending isn’t coming down and, in the short term at least, the effect will be to double the deficit. I’m guessing that their justification is the same as Ronald Reagan’s in the 1980s.
Cutting tax rates can lead, over time, to higher revenues. Although reducing the rate leaves an immediate hole in the budget, the increased economic activity that follows from letting people keep more of their earnings eventually fills that hole. As the Gipper amiably quipped, “I’m not worried about the deficit — it’s big enough to take care of itself.” By and large, it did.
Here, then, is a question for Republican lawmakers. Why not apply the same logic to tariffs? If cutting personal and corporate tax rates boosts the economy, why dampen that effect by simultaneously raising taxes on commerce? If you think about it, that’s all a tariff is — a tax on American consumers.
I ask this question in all seriousness. I know you read the Washington Examiner, guys, because I keep seeing it in your offices on Capitol Hill. In going along with these tariffs, you risk undoing the gains generated by your recent tax reductions. Indeed, if the tariffs escalate into a full-scale trade war between the world’s largest and second-largest economies, you may end up wiping out the recovery globally, not just in the U.S.
You might protest that the matter is out of your hands. The White House announced its trade barriers without asking for your opinion. But I am looking at my little pocket copy of the U.S. Constitution as I type, and it seems unequivocal: “Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.” For the avoidance of doubt, congressmen, that document goes on to give you the responsibility “to regulate Commerce with foreign Nations.”
True, successive presidents have, down the years, found ways of getting around these clauses. They have given themselves the right to impose tariffs in war, or during emergencies, or in the name of national security. But does anyone really think that such criteria apply in this case?
OK, you might say, but even if we could theoretically stop the tariffs in Congress, now is not the time. As we gear up for the midterms, the last thing we need is a row between a Republican president and the Republican majority in the legislature. Well, I have some bad news. You’re going to get that row whether you want it or not.
Look at the way the president keeps lashing out at you — most recently over the spending package and his stalled immigration reforms. He doesn’t single out the Democrats for criticism. He makes a point of attacking Congress generically, thereby positioning himself, despite the office he occupies, as an anti-incumbent.
“Trump doesn’t seem very concerned about losing the midterms,” the veteran GOP strategist Alex Conant told this magazine last week. “Every time he criticizes Congress without singling out Democrats, he’s hurting a Republican’s chances of getting re-elected.” That, Mr. Conant, is the sort of understatement we Brits admire.
The key consideration here, though, is surely a simpler one. Tariffs are wrong on every level. They will destroy jobs in America and abroad with no compensating gains.
Consider what happened when the administration last tried to block imports, proposing a 292 percent tariff on aircraft made by the Canadian firm Bombardier. First, the decision adversely affected Delta and every other U.S. airline, as they were quick to point out. Second, it prompted allied governments, including Canada and the United Kingdom, to look for alternatives to Boeing in their procurement. Third, it forced Bombardier into the arms of Boeing’s chief rival, Airbus.
After all these harmful consequences, the tariffs were ruled to be illegal anyway. Now, in a grisly epilogue, China has announced 25 percent tariffs on Boeing aircraft, in retaliation for the steel and aluminum duties. With the arguable exception of Airbus, there are no winners here, on any conceivable reading of events.
So, what’s holding you back, congressmen? You can decide, not just to strike down these taxes, but to revoke for all future presidents the ability to impose tariffs without the consent of the legislature. In doing so, you won’t just be stimulating economic growth. You’ll be doing what you promised to do when you took your oaths of office, namely supporting and defending the Constitution.
