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Lawmakers want to boost Pentagon input on tariffs

A proposal gives the Pentagon a lead role on deciding whether tariffs are needed to protect national security

Vice chair Sen. Mark Warner, D-Va., left, and chairman Sen. Richard Burr, R-N.C., talk before the start of the Senate Select Intelligence Committee hearing on "Worldwide Threats" on Tuesday, Jan. 29, 2018. (Photo By Bill Clark/CQ Roll Call)
Vice chair Sen. Mark Warner, D-Va., left, and chairman Sen. Richard Burr, R-N.C., talk before the start of the Senate Select Intelligence Committee hearing on "Worldwide Threats" on Tuesday, Jan. 29, 2018. (Photo By Bill Clark/CQ Roll Call)

As the trade war with China drags on, a bipartisan group of lawmakers in both chambers is pushing to give the Defense Department the lead role in analyzing whether tariffs are needed to protect national security.

The draft legislation, released Wednesday in both the House and Senate, marks a significant revision of Section 232 of the Trade Expansion Act of 1962, which gave the Commerce Department the authority to analyze the tariffs and ultimately make a recommendation to the president on whether to invoke national security.

The companion bills would also give Congress final say over whether to impose sanctions under Section 232, mirroring similar legislation introduced last year.

Patrick J. Toomey, R-Pa., and Mark Warner, D-Va., are spearheading the effort in the Senate, while Mike Gallagher, R-Wis., Darin LaHood, R-Ill., Ron Kind, D-Wis., and Jimmy Panetta, D-Calif., are leading the effort in the House.

“The logic is that, if indeed this is a national security concern, then DOD is best positioned to explain what is the actual national security concerned,” Gallagher told CQ. “Commerce still has a role in recommending the appropriate economic lever to pull, but DOD would have the authority for conducting the Section 232 investigation.”

For Gallagher, the rationale is part philosophical — Congress, he believes, should reclaim its authority to regulate commerce with foreign nations — and part practical. Dairy farmers in Gallagher’s agriculture-heavy district are bearing the brunt of some of the retaliatory actions taken by nations affected by the Trump administration’s Section 232 tariffs on steel and aluminum.

Broadly speaking, Gallagher supports the administration’s efforts to push back on China’s harmful economic practices, but he thinks Section 232 tariffs threaten to weaken those efforts by also hurting allies.

“I think the only chance we have of being successful in pushing back against China economically is to unite our allies, to unite the free world in opposition to China’s predatory practices,” Gallagher said. “To simultaneously pick a fight with the EU, with Canada, with Mexico on 232 is undermining our efforts.”

Legislative Path

Placing the Pentagon in charge of Section 232 investigations could make the defense authorization measure, or NDAA, the most likely vehicle. The must-pass policy bill has the impressive track record of being enacted annually for the last 58 years.

Gallagher, an Armed Services Committee member, acknowledged that the “NDAA is probably our best bet for getting this passed.” But he stressed that the decision to change investigative responsibility from Commerce to the Defense Department was “a matter of common sense, based on the national security justifications for the 232 tariffs, that DOD should be the lead agency.”

Panetta, who served on Armed Services during the last Congress but is no longer a member of the panel, said he thinks the bill can pass as a standalone measure.

“The NDAA is always a good vehicle. But I think this bill is strong by itself,” he said. “The fact that it’s bipartisan and bicameral, that bodes well.”

Panetta said he’d like to see the bill move faster than the NDAA, which can sometimes slip to the end of the year before it makes its way through both chambers and to the president’s desk.

Panetta serves on the House Ways and Means Subcommittee on Trade with Kind. LaHood is also a member of Ways and Means. The legislation could also advance through Ways and Means, which has jurisdiction over tariffs.

Strange Bedfellows

Gallagher, who credits Toomey with being the driving force behind the legislation, sees an unusual coalition building for the bills.

“You have conservatives like me who come at this from a philosophical perspective, you have the [agricultural] angle that unites Democrats and Republicans, and I think there are a lot of Democrats who are waking up to the fact that it’s not a great idea to do everything by executive fiat, and that Congress should closely guard some of its equities,” he said.

In addition to Toomey and Warner, the bill’s cosponsors in the Senate include Ben Sasse, R-Neb.; Maggie Hassan, D-N.H.; Lamar Alexander, R-Tenn.; Ron Johnson, R-Wis.; Angus King, I-Maine; James Lankford, R-Okla.; Jerry Moran; R-Kan.; Brian Schatz, D-Hawaii; and Jeanne Shaheen; D-N.H.

Gallagher and then-Sen. Bob Corker, introduced similar legislation last year. But the legislation went nowhere, not even receiving committee hearings.

The Senate’s passage of a non-binding resolution asserting Congress’s right to oversee trade policy may have undercut possible support for that bill, Gallagher said. But since nothing has changed — the Section 232 tariffs are still in place, and the administration is conducting an investigation into using the national security justification to impose tariffs on auto imports — Gallagher felt compelled to try again, this time putting the Pentagon in charge of the investigation.

“Perhaps the biggest foreign policy mistake we made over the last two decades was betting on China’s integration into the global economy, and that that would produce a softening of China’s authoritarian impulses and its aggression abroad,” he said. “Part of that was allowing China’s accession to the World Trade Organization.”

Several countries, including Canada, Mexico and the European Union, have asked the WTO to intervene on the Section 232 tariffs.

“The challenge is to work through the institution of the WTO to crack down on China’s predatory practices,” Gallagher continued. “If we’re simultaneously having to put out fires that we’ve lit with our allies, who should be working with us to push back on China, it undermines the bigger effort here. China is the game . . . If we start to undermine those alliances, we’re going to lose the game against China.”

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