Democrats Won the Tariff Argument—Now Comes the Hard but Necessary Part

Clark Packard

Come January, Democrats will control both chambers of Congress. The final margins will not be known until the remaining House and Senate races are called, but Democrats won overwhelmingly. Several issues moved voters, but trade and tariffs were a major animating force. In the NBC News exit poll, which surveyed nearly 80,000 voters, 65 percent said President Trump’s tariff policies hurt the national economy, while a mere 22 percent believed they helped. 

The warning signs were there well before Election Day. An August Cato Institute/​Morning Consult survey of more than 4,100 registered voters found that 75 percent said tariffs would matter in their midterm vote, and those voters preferred Democratic congressional candidates by 19 percentage points, 55 percent to 36 percent. Meanwhile, 74 percent said the president’s tariffs had raised prices at the checkout counter, including two-thirds of Republicans. Democratic House campaigns spent more than $58 million on ads attacking tariffs, according to a Wall Street Journal analysis; Republicans spent nothing defending them. President Trump once called “tariff” the most beautiful word in the dictionary, but as the Journal’s Greg Ip recently observed, he “has somehow made it one of the most hated words in politics.” 

Voters sent congressional Democrats a clear message: the tariff status quo is unacceptable. The harder question is how to reform tariff laws. Hakeem Jeffries, the presumptive Speaker of the House, said in September that “we have to end the Trump tariffs,” but party leaders have not yet specified which tariffs or how. That vagueness was probably an asset on the campaign trail, but it is a liability when governing. 

The Democratic Party’s recent record shows why. The Biden administration kept the first Trump administration’s China tariffs in place and even raised several. Biden’s trade representative, Katherine Tai, argued that “tariffs and trade can—and in our view must—be used as part of a strategy for growing the middle class and empowering the working class.” Democrats have run against tariffs in the past and then kept them in place once in power. Repeating this would be a mistake, especially when voters have made their preferences well-known. 

The constraint is obvious. President Trump has two years left in office and would almost certainly veto legislation that curbs his tariff powers. Democrats lack the votes to override a veto, and most legislation requires 60 votes in the Senate. 

A Democratic Congress can pass bills to eliminate virtually all Trump tariffs and reform tariff powers, requiring Republicans to vote on them. Likewise, Democrats can attach limits to must-pass spending bills, use their oversight powers to examine how the Trump tariffs were assembled and why they were imposed, and write laws that a future president can sign. The public is already on board: in a Cato survey this spring, 70 percent of voters said presidents should be required to get explicit congressional approval before imposing tariffs, including 56 percent of Republicans. On Election Day, about 7 in 10 voters told the AP Voter Poll that Congress isn’t doing enough to check this deeply unpopular president. 

Eliminate the Low-Hanging Fruit

Two tariff statutes should simply be repealed. After the Supreme Court held in February that the International Emergency Economic Powers Act does not authorize tariffs, the Trump administration immediately pivoted to Section 122 of the Trade Act of 1974 to impose temporary 10 percent surcharges on a wide swath of imports. This was the first use of the statute since its enactment more than 50 years ago. Section 122 is a balance-of-payments tool built for a world of fixed exchange rates, a world that ceased to exist shortly after enactment. Under floating exchange rates, it is an anachronism. The Court of International Trade held the surcharge unlawful in May. The Federal Circuit temporarily halted the enforcement of the ruling, and the government’s appeal outlived the surcharge itself, which lapsed on July 24. The appeal remains pending. Congress should not wait for courts to police each new use. Rep. Jimmy Panetta’s (D‑CA) Reclaim Trade Powers Act would strike the provision entirely. 

Section 338 of the Tariff Act of 1930 is worse. The Smoot-Hawley-era provision authorizes tariffs of up to 50 percent on countries that discriminate against American commerce. No president has ever used it to impose tariffs, and other legislation has largely supplanted it. In July, the Trump administration dusted off the long-forgotten statute, ordering 50 percent tariffs on an initial tranche of about $20 billion in Canadian goods. Canada retaliated against more than $27 billion of American products, and the Trump administration spent the fall revising its own list. A statute that has been dormant for nearly a century and whose only use has been a trade war with our closest ally is not worth keeping. Sens. Kirsten Gillibrand (D‑NY) and Peter Welch (D‑VT) and Rep. Brad Schneider (D‑IL) have introduced legislation to unwind the Section 338 tariffs and refund the duties. The new Congress should go further and repeal the authority itself.

Rewrite Sections 232 and 301

Section 232 of the Trade Expansion Act of 1962 grants the president the authority to restrict imports that jeopardize national security. Courts have read it generously, and President Trump has turned to it as an all-purpose protection statute. It now covers steel, aluminum, and copper at 50 percent; autos and heavy trucks at 25 percent; furniture and lumber; certain patented pharmaceuticals; and drones with polysilicon likely coming in December. The list keeps growing. 

A genuine national security tool may be necessary, but the statute badly needs reform. First, Congress should define national security narrowly and tie it to defense needs. The statute never defines the term, which is how we ended up with “national security” tariffs on furniture. Second, Congress should give the Pentagon, rather than the Commerce Department, the lead role in finding a threat. Third, it should require congressional approval of any action within 60 days, or allow it to expire. That approval mechanism was central to the bipartisan Trade Review Act, introduced last year by Senators Chuck Grassley (R‑IA) and Maria Cantwell (D‑WA). 

Section 301 of the Trade Act of 1974 is designed to challenge specific unfair trade practices by trading partners. On July 24, the day Section 122 tariff surcharges expired, new Section 301 tariffs took their place: 10 or 12.5 percent tariffs on 60 economies, including Canada, Mexico, the United Kingdom, the European Union, Japan, and Korea, on the theory that they had failed to ban and police imports made with forced labor. The Tax Foundation estimates that the tariffs cover close to $1 trillion in annual imports. 

In an ideal world, Section 301 would be scrapped entirely, and the United States would use dispute settlement mechanisms within the World Trade Organization (which would first require Washington to stop blocking appointments to the WTO’s Appellate body, unable to hear new appeals since before the COVID-19 pandemic) and various free trade agreements to challenge unfair practices. If Section 301 is to remain on the books, it should require that remedies be proportionate to the burden on US commerce and aimed at the practice in question; give targeted countries a way out by fixing the offending measure or practice; and require a congressional vote on any tariff action. 

Force a Vote on Repeal 

Process reforms to Sections 232 and 301 matter for the long run, but Americans were voting on prices: 6 in 10 voters told the AP Voter Poll they were very concerned about the cost of food and groceries, for example. President Trump’s tariffs, imposed since 2025, now cover about 54 percent of US goods imports, and estimates of the annual cost to the average household range from about $800 to $1100. The new congressional majorities should pass legislation terminating the Section 232 tariffs, the forced-labor Section 301 tariffs, and the Section 338 tariffs on Canada. Democrats can force Republicans to defend the tariffs on their own merits. If Congress passes that legislation and the president vetoes it after an election fought over the cost of living, Republicans will have to explain the choice to voters in 2028. 

For a decade, the Beltway’s conventional wisdom was that protectionism was good politics. To be sure, no election is a clean test of anything, but it is hard to read the polling, the ad spending, and the election results as anything other than a rejection of the president’s ill-conceived tariff agenda. Democrats now have two years to turn the campaign theme into concrete proposals to reform tariff authorities. 

Restricting the president’s tariff authority is a good idea on both political and policy grounds. Democrats should seize this opportunity to take back tariff power, not just from this president but from future presidents as well, including Democrats. A Congress that objects to unilateral and reckless tariffs only when the other party imposes them is failing its constituents and the Constitution. 

Source: https://www.cato.org/blog/democrats-won-tariff-argument-now-comes-hard-necessary-part