The Daily Dish

The War Over Tariff Authority

The battle over who gets to wield U.S. tariff authority is entering a new phase. President Trump continues to push the boundaries of the executive branch’s tariff powers, while the judicial branch acts as a guardrail. But there are signs Congress may decide to cease being a mere bystander.

Many of the tariff authorities the Trump Administration has relied on are either related to national security or long-forgotten relics that lack legal precedence. Congress delegated these authorities with the idea they’d be used sparingly and in times of emergency – as limited exceptions in a more than 50-year era of U.S.-led international trade liberalization following World War II.

Now that President Trump has proven these tariff tools can – in theory – be used or abused on a whim, the role Congress plays in trade policy has become all the more important. Could the legislative branch be ready to claw back some of its long-neglected Article I authorities? There are a couple of bills worth paying attention to:

  • The Congressional Trade Powers Reform Act of 2026 Introduced by Senator Wyden (D-OR), this bill would fully eliminate Section 122 of the Trade Act of 1974 – most recently used to impose 10-percent tariffs across the board – and Section 338 of the Tariff Act of 1930, which may soon be used for 50-percent tariffs on Canada. Both tariff authorities are untested and lack legally sound arguments to justify their implementation, but this hasn’t stopped the Trump Administration. The bill would also require congressional approval before Section 232, 301, or 201 tariffs are implemented, thereby creating far greater congressional oversight than currently exists. If passed, the bill would be a significant step in limiting executive branch tariff powers and getting Congress back in the driver’s seat.
  • The Sanctioning Russia Act of 2026 This legislation has gained a great deal of momentum since the passing of Senator Graham. Introduced by a bipartisan group of senators, it specifically authorizes tariffs of up to 100 percent on the five largest purchasers of Russian energy products (without identifying the data source for determining those). The legislation provides no objective criteria for selecting, removing, or reclassifying countries – which may give the Trump Administration broad new authority to target any country it deems a facilitator of Russian oil sales. Still, the bill is noteworthy as it represents a potential move by Congress to specifically legislate new tariff action.

Regardless of whether Congress restrains executive power or grants the president new authorities, as noted above, President Trump’s Section 338 tariffs of 50 percent on Canada are still scheduled for August 19. As AAF’s Shipment has noted, this untested authority could grant the president vast new tariff powers if left uncontested by either Congress or the courts.

For one, it would allow a complete ban on imports from specific countries, meaning Trump could follow through on his threat to cut off trade with Spain (at least). For another, Section 338 allows for “secondary tariffs” on countries that benefit from one country’s discrimination against U.S. goods, meaning tariff threats can more easily be implemented.

The future of legislative versus executive tariff authority remains an open question. It ultimately falls upon Congress to decide how quickly it wants to act and whether it truly seeks to retake its constitutional role in trade. And while major action is unlikely in the few remaining weeks of the current session, both Republicans and Democrats may be emboldened by the coming midterm elections.

Stay tuned.

Disclaimer

Fact of the Day

As of July 29, the Fed’s assets stood at $6.7 trillion, down $9 billion from the prior week and over $95 billion higher than a year ago.

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