National Interest

by Thomas J. Duesterberg

    A more assertive Congress would reassure US allies of the consistency and stability of US trade policy.

    President Donald Trump unleashed a tirade of invective and bravado at the Supreme Court after its majority struck down the use of International Emergency Economic Powers Act (IEEPA) tariffs. But in the long run, Chief Justice John Roberts and colleagues did him a favor by opening a door to a comprehensive course-change on the White House’s trade and international economic policy.

    The American and international business communities breathed a sigh of relief at the prospect of limiting the arbitrary and capricious invocations of a previously obscure statute, which added costs and investment uncertainty to their business plans. Congress has been given a crutch to regain its lost primacy over trade policy. Meanwhile, the US public is chafing at a weak job market and persistent inflation.

    In a poll released last Friday, 64 percent of Americans disapproved of the direction of Trump’s tariff policy, which could encourage election-anxious members of Congress to push back. The president and his supporters in Washington could certainly benefit from addressing these domestic problems in a constructive way.

    Many of America’s market-oriented allies were losing hope of a more orderly and consistent trade order. However, they maintained ties with the United States, recognizing that they still must work with the world’s largest economy despite bipartisan domestic support for some version of Trump’s rebalancing agenda. Friday’s decision allowed these leaders to look toward rebuilding cooperation with the still “indispensable power.” Yet only the European Union has moved to amend the trade agreement it reached in 2025 with the Trump team.

    It is still possible to make progress on the rebalancing project announced with considerable fanfare in the National Security Strategy in early 2025, notably by “consolidating global trade relationships.” But the United States will need to make a major change of course. A return to a system dominated by the World Trade Organization is no longer feasible, given its inability to solve numerous long-standing problems, especially the disruption and deindustrialization caused by the mercantilist and aggressive People’s Republic of China. And Congress certainly has a vested interest in reasserting its authority over trade policy, as stipulated by the Constitution and reaffirmed by the Roberts Court.

    With Trump standing down on his IEEPA-centered tariff assaults, policymakers on Capitol Hill should work with the president to pursue a strategy based on three key pillars: cooperation among market-oriented allies to build a new trade system that excludes bad actors like China; enhanced congressional oversight of US trade agreements; and continued acceptance of allies’ “rebalancing” trade agreements with Washington.

    Despite the political inconsistency of Trump’s trade policy, there is a clear case for allies to work with Washington. The Russia-China-led alliance of authoritarian nations poses a direct political, military and economic threat to liberal, rules-obsessed Europe. The danger of Russian aggression beyond Ukraine—which Europe cannot deter on its own—is a major incentive to maintain close ties with the militarily dominant United States.

    And despite Trump’s erratic trade actions, any realistic self-assessment of Europe’s long-term interests, as Germany has discovered, cannot conclude that alignment with mercantilist China instead of the United States (the world’s biggest importer) would benefit its economy. In the last year, the Chinese economy has continued to deteriorate and its putative allies in Russia, Iran, Venezuela and Syria have fallen into potentially fatal economic downturns.

    South Asian and Pacific Rim countries face a more difficult choice due to their proximity to and traditional trade with China. But given Xi Jinping’s growing aggression toward Taiwan, the South China Sea and even India and the persistence of China’s structural dependence on exports for economic growth, this region needs to keep trade doors open to the United States. Chinese import markets are no match for those of the West, nor is there a substitute for the US security umbrella.

    The broad acceptance of Trump’s trade agreements shows that market-oriented partners recognize the importance of rebalancing to protect an open economic and political order anchored by the United States. The EU’s trade commissioner, Maros Sefcovic, recently opined that the WTO no longer serves its purpose of enforcing reciprocal fair trade or equal treatment among its members through the most favored nation principle. The Trump agreements could therefore serve as a starting point for negotiating a new market-based trade order.

    The second pillar would be the exclusion of China and its authoritarian, mercantilist allies from the new and updated rules-based system. A promising template for a new system, as it is more open and addresses contemporary issues such as digital trade, is the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), although its tariff schedules would need to be reviewed by Washington. The United Kingdom is already a member and the EU is in advanced talks to join. Expanding the United States-Mexico-Canada Agreement (USMCA) could also play a significant role.

Why would the United States engage in talks for a new system, especially after both Trump and his two predecessors rejected what eventually became the CPTPP and many failed efforts to fix the WTO

    First, the economic disruption and uncertainty caused by a determined president seemingly untethered from any rules other than his own intuitions has been ruled unconstitutional and is clearly harmful to a well-functioning market system. The uncertainties of US trade policies hamstring business communities here and abroad, leaving them with little confidence to make new investments.

    US investment, apart from the artificial intelligence boom, is weak, job growth is slowing and tariffs exacerbate persistent inflation. A study by the Kansas City Federal Reserve estimated job losses of nearly 20,000 per month due to the US tariffs. Public opinion, even among MAGA voters, is moving against Trump’s trade policy.

    Trump himself could claim victory should allies agree to maintain their 2025 trade deals and he could help reverse his slide in public approval by ratcheting back his tariff assault. This ought to stimulate better economic performance by reviving business and consumer confidence.

    Congress has an important role to play and an institutional interest in checking presidential overreach in international trade policy. This power is clearly assigned to the legislative branch by the Constitution and was strongly reaffirmed by the Supreme Court decision. By requiring prior authorization for initiating and then finalizing trade negotiations through the tool of Trade Promotion Authority, as Congress did until the Biden administration, the US legislature can contribute to a new grand bargain for international trade. Bipartisan leaders like Senators Chuck Grassley (R-IA) and Maria Cantwell (D-WA) are pushing measures to claw back their primary oversight authority over trade.

    Indeed, some members of Congress are already moving against the worst aspects of Trump’s tariff policy, probably emboldened by new public opinion polls and the consistent opposition from major business and farm groups. The House narrowly passed a measure in early February to invalidate tariffs on Canada and several members, led by Representative Don Bacon (R-NE), claim to have the votes to overturn the Section 122 15 percent global tariffs Trump announced after the Supreme Court released its ruling. At least four Republican senators have already signaled they would support such a measure.

    Along with a Supreme Court rejection of the use of IEEPA, renewed congressional oversight would go a long way to restoring consistency and continuity in policy. This would at least reassure allies and the business community and restore trust in US leadership, both for addressing acute current problems and for building a new global economic system.

    A more stable policy under greater congressional oversight, in sum, promotes a broad range of interests. Congress itself would regain its constitutional authority and limit the executive’s unbounded discretion and accretion of power. The business community would be able to operate in a more predictable policy environment. And Trump would advance his agenda of rebalancing trade and resisting China’s assault on US leadership.