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FART Breaks WTO, Adds to Midwest Economic Drag

Donald Trump is asking for authority to raise tariffs at will, in violation of the Constitution and World Trade Organization rules. His Administration has drafted the “United States Fair and Reciprocal Tariff Act” (US FART) Act, which would allow the President to set tariffs without Congressional consent and in violation of two key WTO principles:

  1. The “Most Favored Nation” (MFN) principle that countries can’t set different tariff rates for different countries outside of free trade agreements;
  2. “Bound tariff rates” — the tariff ceilings that each WTO country has already agreed to in previous negotiations [Jonathan Swan, “Exclusive: A Leaked Trump Bill to Blow Up the WTO,” Axios, 2018.07.01].

Swan’s source says US FART is “insane” and stands zero chance of passing Congress. We should hope so, since, as Tim Bjorkman points out, Congress needs to reassert its Article 1 Section 8 authority to regulate trade with foreign nations.

US FART would only intensify Trump’s kamikaze tariffism, which is already slowing down economic growth in the Midwest:

A new survey indicates the Midwest economy is still in expansion mode, but the growth is slowing due to trade and tariff concerns. Creighton University economic Ernie Goss surveys supply managers in nine states, including Iowa, and just issued his report for June.

…“These trade tensions that’s really a significant factor, particularly for Iowa and most of the eight other states that we survey simply because agriculture is in the cross-hairs of any trade tensions, tariffs, trade wars and that’s certainly having some impacts, according to our survey,” Goss says [O. Kay Henderson, “Creighton Professor’s Midwest Survey Shows Economic Growth, Tensions over Trade,” RadioIowa, 2018.07.02].

Trump hasn’t slowed down Molded Fiber Glass yet. After Senator John Thune salvaged the production tax credit that Trump and Noem would have more hastily demised, the Aberdeen manufacturer got an order for wind turbine blades that allowed the plant to stay open through this summer. Now they’ve received another order that will allow MFG to hire another 60 people above its current 380 workforce. (No word on who placed the order, but it’s a month earlier than my 2018 Blog Wish List story #3!)

The U.S. Chamber of Commerce is trying to keep Trump from doing more damage to America’s economy. Yesterday the Chamber released an analysis of the cost of Trump’s trade war for each state. By the Chamber’s figures, South Dakota could lose $129 million in tariffed exports:

  • $86 million in meat usually shipped to Mexico;
  • $28 million in manufactured goods usually shipped to Canada;
  • $14 million in agricultural products usually shipped to China; and
  • $904 thousand in manufactured goods usually shipped to Europe.

Tariff losses would be even worse in Nebraska ($327M), Minnesota ($498M), and Iowa ($977M). The Chamber’s data shows $59.4 billion in U.S. exports imperiled by the tariffs so far. Automakers contend the Trump tariffs could add $4,000 to $5,000 to the price of new car. U.S. tariffs alone may cause the U.S. auto industry to shed 195,000 jobs; full retaliation from our erstwhile trade partners and allies could drive those auto job losses to 624,000… and that’s before anything Trump’s US FART would impose.

So have we established yet that Donald Trump doesn’t care about anyone or anything—jobs, the Midwest, the Constitution, the global economy—other than himself?


  1. Robert McTaggart 2018-07-03 12:02

    I guess with the steel tariffs in place, don’t be surprised if you see the headline “FART breaks wind”.

  2. Robert McTaggart 2018-07-03 12:11

    Something doesn’t smell right with this legislation…

  3. Jason 2018-07-03 12:32

    Please provide a link to proof this would be unconstitutional if this act would be passed by Congress.

  4. Robert McTaggart 2018-07-03 12:39

    If you consider a tariff to be a tax, Congress alone has the power “to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

  5. Kal Lis 2018-07-03 13:22

    I apparently was mistaken in my belief that self-proclaimed conservatives believed in original intent and the primacy of Congress.

    Presidents and cowardly Congresses have used to War Powers Act to conduct undeclared wars instead of having Congress do its Constitutional duty to declare wars for decades. Given how that fecklessness has turned out, it’s shocking to see anyone think handing tariff power over to the executive with no check at all won’t effectively shred the Constitution.

  6. Jason 2018-07-03 13:23

    I’m not saying I want this. I am saying Congress has the ability to do it contrary to what Cory said.

  7. Cory Allen Heidelberger Post author | 2018-07-03 14:20

    I’m glad Jason and I agree that giving the President unilateral authority over trade is a really bad idea. Such bad ideas are typical of the current authoritarian regime, which lacks respect for the Founders’ intent.

    So let’s tackle Jason’s quibble. Can the House cede its Constitutional mandate to originate appropriations bills to the Senate, or to the Judicial Branch?

    Can Congress cede its veto-override power to the Supreme Court?

    Can the House cede its authority to choose its Speaker to the President?

    Can the House and Senate swap their powers of impeachment and trial, or cede those powers to the special prosecutor and a grand jury?

    Can Congress put the President in charge of the District of Columbia?

  8. Jason 2018-07-03 14:25

    I highlighted the passage in the Constitution which proved you wrong Cory.

  9. Cory Allen Heidelberger Post author | 2018-07-03 15:28

    Jason, once again, you mistake “offering a counter-interpretation” for “proving you wrong.”

    I’m with Kal Lis: the last clause of Article 1 Section 8 does not grant Congress the power to confer its Constitutional powers to other branches of government. That would include the taxing power Robert points out. Article 1 Section 8 doesn’t say, “Congress can surrender its powers to the President and go fishing.” It serves as a phrase to allow Congress to take care of details in exercising its powers. Unilateral tariff authority is not a detail; it is the actual regulation of commerce with foreign nations reserved to Congress alone.

  10. Jason 2018-07-03 15:34

    Congress an exercise it’s power to let the President take care of the details. It can also revoke that power.

    There is no need to interpret it because it is in black and white.

    There is no ambiguity.

  11. Jason 2018-07-03 15:58

    Most farmers forward contracted and most don’t even have to sell this years crop this year. Your post is meaningless.

    I see you still are enjoying the 300% tariff on US Milk.

  12. mike from iowa 2018-07-03 16:59

    Hedging of Expected Production on April 1

    Only 16% of the respondents indicated that none of their 2018 corn production had been hedged by April 1, 2018 (see Table 1), meaning that 84% hedged a portion of expected production. Those that did hedge were then asked what categorical range of expected production was hedged:

    15% indicated between 1 and 10% hedged,
    34% indicated between 11 to 25% hedged,
    28% indicated between 26 to 50% hedged,
    5% indicated between 51 to 75% hedged, and
    2% of the survey respondents indicated that over 75% hedged (see Table 1)

    The rest of the survey is in here. Most farmers hedged very small amounts of their crops.

  13. mike from iowa 2018-07-03 17:02

    As for 300% tariffs, I posted Drumpf had several chances to change that and walked away from them. Do try to keep up.

  14. Jason 2018-07-03 17:08

    What about the hedges in May?

    We have more than just milk tariffs to take care of Mike.

  15. Jason 2018-07-03 17:09

    What about the hedges in April?

  16. mike from iowa 2018-07-03 17:14

    Trans-Pacific Partnership tackled dairy tariffs

    As one of his first official acts as president, Trump pulled the United States out of the Trans-Pacific Partnership. But Canada went on to complete the massive free trade deal with 10 other nations, including Japan, Australia and Mexico.

    The deal allows signatories to send an increasing amount of dairy products to Canada over the next two decades — with zero tariffs. That includes milk, cream, butter, cheese and ice cream, among other products.

    “The US would have enjoyed these benefits had it not decided to exit the original TPP deal,” said Christophe Bondy, a trade negotiation expert and special counsel at law firm Cooley.

    Another recent free trade deal is opening up Canada’s market to cheese from the European Union.

    By 2022, the amount of tariff-free European cheese that will be allowed into Canada will reach 16 million kilos — the weight equivalent of 78 Statues of Liberty

  17. Jason 2018-07-03 17:20

    Even Hillary was against TPP.

    Are you saying only milk tariffs matter?

  18. Debbie 2018-07-03 18:04

    Congress cannot outright cede, but it can reinterpret the language to allow Trump to do it.
    Funny but the Dems didn’t mind when Bush and Obama did this.
    Slippery slopes , once you allow it to slip by once you allow it to be used for anything.

  19. Jason 2018-07-03 18:09

    Congress isn’t reinterpreting the language. It’s in black and white. Congress can pass a law to execute their laws.

  20. Porter Lansing 2018-07-03 18:11

    You just make stuff up, Jason.

  21. Jason 2018-07-03 18:16

    What did I make up Porter?

  22. Porter Lansing 2018-07-03 18:19

    Congress can pass a law to execute their laws.

  23. mike from iowa 2018-07-03 18:20

    Jason, you are the one that brings up 300% tariffs on milk.

    You realize HRC is not in the WH although she should be.

    And yer buddy Drumpf tweeted congratulations to himself for keeping us out of a war with NK with his remarkable negotiati….giving away the farm to Li’l Kim skills.

  24. mike from iowa 2018-07-03 18:21

    One last thing, yer feckless leader said he is helping foreign motorcycle makers destroy Harley Davidson. Is it time for impeachment…..yet?

  25. Cory Allen Heidelberger Post author | 2018-07-03 18:46

    Debbie, please stop putting your imaginings about other Democrats in my mouth. I mind, and Congress would be wrong to do it. I have made no defense of other past policies in this post, and I challenge you to find past posts in which I have made such a claim.

    My point stands: Trump usurping authority over international trade is unconstitutional (and stupid, because he knows less about trade than anyone else in Washington). Congress ceding its Article I Section 8 authority over international trade to Trump is unconstitutional (and stupid, because it feeds Trump’s dangerous inclination to authoritarianism, which is exactly what the Founding Fathers crafted the Constitution and separation of powers to avoid).

  26. jerry 2018-07-03 21:09

    Newsprint. Anyone know where that comes from? Hint: Canada. Yep, so now the newspapers will have to pony up big time to print the news. Big papers like in Sioux Falls and Rapid City, will just charge advertisers more to be patriotic. Small town news, you’re in for a tumble.

    BTW, Poland just declared their supreme court null and void.

  27. Debbo 2018-07-03 22:26

    A new poll out today, by Quinnipiac I believe, found that a majority of Americans want Congress to do its job and not cede a damn thing to any other branch of the federal government.

    If I can find it again, I will provide a link.

  28. Jason 2018-07-03 23:02

    I agree Debbo. That means Congress not ceding it to the Supreme Court.

    Remember, the Supreme Court is equal to the other two branches.

  29. mike from iowa 2018-07-04 06:36

    I remember a certain crooked wingnut SOH who decided he would dictate to the Scotus what cases they would review.

    So much for three co-equal branches of gubmint.

    This from 2005 claims dumbass dubya took the bi-partisan out of approving judges and shows how the far right controlled the party and was willing to remove the filibuster so dubya could get single issue judges installed.

  30. Nick Reid 2018-07-05 17:11

    The Constitution clearly denotes this power to Congress and no true conservative would cede this power to the executive branch (frankly, no true conservative would support anything but free trade anyway). Remember Trumpinistas, this power will absolutely be in the hands of someone you do not fawn over in the future. Walk away from principle at your own certain peril.

  31. Cory Allen Heidelberger Post author | 2018-07-05 18:11

    I’m glad Nick can see around corners. We need a lot less partisan positioning and a lot more discussion of, “How should we structure government, regardless of who’s in charge?”

    You’ll notice that in his partisan zeal, Jason has ignored the rather complicated but effective response that executing Congress’s laws is not the same as ceding Congress’s power to another branch of the government.

    I oppose this specific government overreach because it is unconstitutional. My opposition is heightened by the fact that the President who wishes to usurp this power is an idiot incapable of executing this power with good intent.

  32. Debbo 2018-07-05 20:27

    “I oppose this specific government overreach because it is unconstitutional. My opposition is heightened by the fact that the President who wishes to usurp this power is an idiot incapable of executing this power with good intent.”

    So say millions upon millions upon millions of Americans, the majority of the citizenry.

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