• Senate Finance Committee Chairman Chuck Grassley says one of his policy goals in 2020 is to rein in Trump’s tariff powers under Section 232 of the 1962 Trade Expansion Act.
  • Section 232 gives presidents the power to impose tariffs for national security purposes; Trump has used it to justify high steel and aluminum tariffs on longtime U.S. allies.
  • In passing the new United States-Mexico-Canada Agreement, Grassley may have given away his best bargaining chip for drawing more concessions from Trump on the tariff issue.

Reining in Section 232

President Donald Trump’s unprecedented use of tariffs to achieve his foreign policy goals has raised concerns not just from Democrats, but lawmakers in his own party as well.

As the 2020 legislative session kicked off, U.S. Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said one of his policy goals is to rein in Trump’s tariff powers under Section 232 of the 1962 Trade Expansion Act. This portion of the law gives presidents the power to impose tariffs for national security purposes. 

Trump has used Section 232 to justify high steel and aluminum tariffs on longtime U.S. allies like Canada, Mexico, the European Union, and Japan, a move that critics say abuses the intent of the law and sets a precedent for future presidents to wield even greater executive power.

“Congress has delegated too much authority to the president of the United States,” Grassley told reporters in June while discussing Section 232. “This is not about Trump. It’s about the balancing of power.”

“This issue goes beyond Trump,” wrote Eric Boehm, a reporter at the libertarian magazine Reason. “In the first 54 years that Section 232 was on the books, presidents had invoked its powers only six times. Trump’s repeated use of it to reshape global trade is effectively redefining the law’s powers away from concerns about national security and turning Section 232 into just another tool for presidents to make policy.”

In January Grassley said he remains hopeful that there is enough political will on the Senate Finance Committee to improve congressional oversight Section 232 — with the ultimate goal of reaching a veto-proof majority on legislation to address the issue.

Across the aisle, the committee’s top Democrat, Sen. Ron Wyden of Oregon, said he is open to working on Section 232 as well. 

“I am all for putting some guardrails in this administration’s unpredictable and chaotic trade policy. We haven’t been able to find the solution yet, but I am ready to continue to work with the chairman to find a legislative solution that will garner wide bipartisan support,” Wyden said.

Grassley’s political balancing act

Grassley, an influential Senator with a pragmatic bent, has achieved a balancing act in recent years that is rare among GOP lawmakers: he has critiqued and challenged Trump’s executive actions at key junctures while still maintaining a working relationship with the president.

Last year, for instance, when Grassley threatened to bottle up Trump’s rewrite of the North American Free Trade Agreement (NAFTA) unless the administration lifted the steel and aluminum tariffs it had placed on Mexico and Canada, Trump backed down.

In spite of that standoff, however, Grassley was also instrumental in the formation and passage of the new United States-Mexico-Canada Agreement (USMCA). It passed with strong bipartisan support in both the House and Senate and was recently signed into law by Trump, handing the president his most significant trade achievement to date.

In passing the USMCA, however, Grassley may have just given away his best bargaining chip for drawing more concessions from Trump on the tariff issue. The new deal does not exempt Canada and Mexico from future Section 232 tariffs imposed by Trump or a future president. 

“So the president could technically still impose tariffs on Canada and Mexico on other issues that he thinks are a concern for national security,” said Inu Manak, a research fellow for trade policy at the Cato Institute, a libertarian think tank. “At the end of the day, there’s still a lot of uncertainty left over, and a lot of leeway for the president to do what he wants.”

As president, Trump is free to veto any bill adding limits to Section 232 that Grassley might be able to pass, Boehm noted, adding that “if Grassley is having this much difficulty simply getting some reforms out of his committee, it’s unlikely there is enough support to override a presidential veto.”

Currently there are two bipartisan bills in Congress that would curtail Trump’s use of Section 232: the Bicameral Congressional Trade Authority Act, sponsored by Sens. Pat Toomey (R–Penn.) and Mark Warner (D–Va.), and the Trade Security Act, sponsored by Sens. Rob Portman (R–Ohio) and Doug Jones (D–Ala.).

Read more about these bills in Reason.


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