The Founders Would Be Appalled by Trump’s Tariff Policy—Even Hamilton

President Trump has, it is clear, upended the global trading system and America’s place in it through his aggressive use of tariffs as a tool of personal power. These actions would have shocked the Founding Fathers as offensive to the spirit of their new Constitution in a variety of ways. The fact that arguments in favor of their use are advanced by people who claim to be the most ardent supporters of the US Constitution might shock them even more. Yet perhaps their checks and balances might yet hold; we shall soon hear from the courts about that (the Federal Circuit Court of Appeals heard arguments on July 31). 

Let us begin, as is traditional, with a long list of abuses and usurpations that the President has perpetrated in the name of raising tariffs. We know that the President believes that “trade is bad” and “tariff is the most beautiful word in the dictionary” (the latter with some minor qualification). So, it should come as no surprise that he has been enthusiastic about raising tariffs.

In his first term, the President stuck to the old protectionist saw of using tariffs purportedly to address national security concerns under established powers used by many Presidents. This term, he discovered a new power, unappreciated by any previous President, in the International Emergency Economic Powers Act (IEEPA), passed in 1977 as a law which did not mention tariffs but allowed the President to “regulate imports” in the event of a national emergency. The President declared several emergencies, but the most important of those for our purposes was when he found “large and persistent annual US goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States.” 

Based on this emergency, the President announced a package of tariffs on every country in the world, including those with whom the US has a trade surplus, like the UK and Brazil. These “Liberation Day” tariffs were explicitly aimed at addressing foreign countries’ tariff barriers, non-tariff barriers, and “cheating.” They used an objective formula – the values of the trade deficit divided by the countries’ exports to the US, then divided by two, with a minimum of ten percent to address this. As I mentioned earlier in these pages, among other things, this formula punished poor countries for the crime of being too poor to buy US goods. At least, however, these tariffs were tied to the ostensible emergency. 

Since then, however, we have seen revisions to the tariffs in a variety of unpublished deals that do not explain the reasoning behind the revisions. In some cases, the President has seen fit to impose large tariffs for other reasons. In the case of Brazil, which, as mentioned, has a trade surplus with the US, it is because of the supposed persecution of former President Bolsonaro, a Trump ally, and Brazilian censorship of American social media platforms. Ongoing difficult negotiations with Canada have been further complicated by the President’s reaction to Canada’s possible recognition of Palestinian statehood. India has been threatened with very high tariff rates over its ongoing trade with Russia. 

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