Trump’s “Trade Aid” Takes Road to Serfdom Paved by Congress

In early 2018, President Trump imposed duties on steel and aluminum imports under patently false pretenses[1]. Despite overwhelming evidence to the contrary, Trump declared that the tariffs were required to ensure commodity supplies “necessary for critical industries and national defense.” In fact, military demand for steel and aluminum represents only a small fraction of U.S. production. Furthermore, our top source for these imports—by a significant[2] margin[3]—is Canada, a country whose industrial base is legally incorporated into U.S. defense planning.

Predictably, our trade partners retaliated with tariffs on almost 800 agricultural goods exported by the U.S., worth roughly $26 billion[4]. To assist agricultural producers harmed by the president’s trade war, the Trump administration last week announced[5] that it would distribute up to $14.5 billion in direct payments to “great patriot” farmers. Last week’s announcement occasioned the second round of so‐​called “Market Facilitation Program” payments—in 2018, the administration made available $10 billion for the same purpose[6].

Trump, therefore, regulated domestic agricultural producers out of $26 billion, and then he gave them $24.5 billion in direct payments as compensation (among other announced measures). Big Brother’s right hand gives what his left hand takes.

In achieving this gross inefficiency, Trump’s policymaking tools were the phone and pen, which he wielded with obvious insincerity. Indeed, this is the sort of untruthful central planning typically associated with authoritarian leaders in banana republics, albeit on a far lesser scale. Yet it is occurring here in America, renowned the world over as a beacon of freedom and economic liberty.

How did this happen?

Though the Constitution accords the legislative branch plenary power to impose tariffs and spend public money, Congress possesses wide latititude to delegate these functions to the president and his subordinates. Regarding President Trump’s “national security” tariffs, I previously observed in The Hill[8]:

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