Scott Lincicome, Clark Packard, and Chad Smitson
Cato scholars have argued for years that Congress should take back some of the tariff powers it handed to the executive branch over roughly the last hundred years. Article I, Section 8 of the Constitution gives Congress, not the president, the authority to “lay and collect Taxes, Duties, Imposts and Excises” and to regulate commerce with foreign nations. Throughout President Trump’s two terms in office, Congress has watched from the sidelines while the administration unilaterally imposes one legally dubious (to say the least) and economically destructive tariff after another, most recently reviving a nearly 100-year-old, never-before-used law (Section 338 of the Tariff Act of 1930) to heavily tax imports from Canada. Yet a recent bill introduced by Sen. Ron Wyden (D‑OR) is a positive sign that Congress may soon finally take this constitutional role seriously.
The last five months perfectly illustrate the problem. In February, the Supreme Court held in Learning Resources v. Trump that the International Emergency Economic Powers Act does not authorize tariffs like the “Liberation Day” tariffs the president imposed in the spring of 2025. Within hours of that decision, the Trump administration’s entire justification for the tariffs shifted dramatically. No longer was the United States facing an international emergency that only tariffs could fix; instead, according to the Trump administration, the United States was now facing a large and serious balance-of-payments problem because of persistent trade-in-goods deficits—one that could only be resolved through aggressive, albeit temporary, new tariffs (imposed pursuant to Section 122 of the Trade Act of 1974, an authority that only makes sense in a world of fixed exchange rates—one that has not existed for about 50 years). The Court of International Trade rejected the administration’s claims in May, and the temporary tariffs are set to lapse tomorrow.
Late Thursday afternoon (July 23), they were replaced by another round of legally dubious tariffs targeting “forced labor” under Section 301—duties that, as Scott Lincicome just detailed in The Dispatch, have major flaws, too.
But wait, there’s more. Earlier in the week, the administration justified the new tariffs via the never-used Section 338 on the grounds that Canadian policies on automobiles, dairy, and alcohol products discriminate against American producers. The president likewise threatened to impose additional tariffs on Canada in response to wildfire smoke crossing into the United States (there is no legal authority granting presidents the power to impose tariffs in response to foreign land management actions). Meanwhile, other Section 301 tariffs, this time on overcapacity, are also in the pipeline.
Against this backdrop comes a serious reform effort led by Sen. Wyden, the ranking member of the Senate Finance Committee (which has authority over US trade policy). The Congressional Trade Powers Reform Act of 2026 (CTPRA) would claw back substantial tariff authority from the executive branch and return it to Congress as envisioned by the Constitution. The legislation would be a marked improvement over the status quo, but there are still areas for improvement.
The Good: Reversing the Status Quo and Repealing Unnecessary Tariff Authorities
First and foremost, CTPRA’s central reform is an affirmative approval requirement. No trade restriction could be taken under Sections 2321 of the Trade Expansion Act or Sections 2012 or 3013 of the Trade Act of 1974 unless the president first submits a proposal to Congress and Congress approves a joint resolution affirming the proposed tariffs with a statutorily created expedited timeline.
Under the status quo, the president has been unilaterally imposing destructive tariffs in an ad hoc and legally dubious way, while the burden is on Congress to take exception, debate the merits and faults of the policy, and overturn the president’s decisions (requiring veto-proof majorities in both chambers). This arrangement lets inertia stymie efforts to dismantle tariffs; the taxes are sticky by default, regardless of desirability.
Instead, Sen. Wyden proposes a model that reverses that: the onus falls on the White House and the pro-tariff coalition to prove any tariff’s necessity, and Congress’s embedded inertia would then work against the tariff. The bill also institutes a 180-day sunset requirement, requiring the executive branch to prove the benefits of each tariff action (which includes quotas, tariff-rate quotas, and other similar restrictions) or else it expires.
Next, the act wisely repeals the outdated tariff authorities in Section 122 of the Trade Act of 1974 and Section 338 of the Tariff Act of 1930. These archaic authorities have been exhumed by the administration in its effort to rebuild the tariff wall following the Supreme Court’s decision striking down the IEEPA tariffs. Yet Section 122 serves to enforce a monetary regime that no longer exists, and Section 338 is largely redundant in intent to the more modern, investigation-intensive Section 301 (albeit a rigor that is being abused, as pointed out below). While we applaud the axing of two archaic tariff policies, we can’t help but wonder if it will just lead to a sort of tariff authority whack-a-mole, encouraging the administration to dust off the US Code and search for the next obscure, decades-old law.
CTPRA also clarifies that any binding trade agreements would require congressional approval, taking a stand against the pattern of “framework agreements” the administration has used to circumvent congressional approval. Examples include agreements with Japan, the EU, the UK, and South Korea, all of which set tariff rates and secured hundreds of billions of dollars in investment commitments exclusively through executive orders. While the “binding” language is vague and could be vulnerable to loophole exploitations (as this administration is wont to find), this is a sensible check on highly consequential international arrangements.
Finally, the act moves the office of the United States Trade Representative (USTR) out of the Executive Office of the president and into its own separate agency and establishes an inspector general to audit, investigate, and protect against fraud, abuse, and corruption. We welcome this attempt at the depoliticization of USTR, which would hopefully decouple the office and its trade strategy from the short-term, chaotic, and partisan cycles that disrupt and distort its operations.
Areas for Improvement
While CTPRA would radically improve the status quo, there are still areas for improvement.
Existing tariffs get a pass.
Whatever the merits of a new approval process, CTPRA only applies to trade actions taken after enactment. Nothing in the bill would terminate Section 232 tariffs, nor the existing and newly announced Section 301 tariffs. Absent explicit elimination, CTPRA should mandate votes of approval by Congress for the existing tariffs to remain in effect. The practical result is that the very tariffs that prompted legislation in the first place would outlive it—insulated by the same rules that let them accumulate.
Section 301’s substantive standards remain untouched.
CTPRA adds a procedural gate in front of Section 301 but leaves the statute’s substantive language as is. We’ve written in the past about the illogic of the excess-capacity arguments used to justify the tariffs, and Scott’s recent piece explores the absurdity of the forced-labor rationale as well. The wanton disregard for legitimate investigation renders Section 301 a tariff-generating machine for any purpose, and by leaving its overly broad language untouched, CTPRA does little to prevent more outrageous excuses for tariffs in the future.
Committees are vulnerable to partisan / interest group capture
CTPRA creates a new Joint Committee on Tariffs and Trade (JCTT), but this proposal deserves some skepticism. There is a well-worn pattern of similar entities—created with good intentions—being captured by parties or interest groups with a strong financial interest in doing so. The record of the US International Trade Commission (ITC), for example, has slowly moved from neutral—issuing both pro- and anti-tariff determinations at an even clip—to markedly more protectionist in recent years. The strongly emphasized bipartisan, bicameral, and overall impartial nature of the JCTT is encouraging to see on paper, but in practice, it could be a different story.
Looking ahead
As the midterms approach, it would be naïve to expect CTPRA to pass. Republicans hold both chambers and have yet to signal a party-wide interest in opposing the administration’s tariffs (despite a few grumblers). Still, it’s encouraging to see a prominent member of Congress with direct responsibility for setting US trade policy working to reassert the branch’s Article I authority over taxation and trade. We hope this could be an indication that Congress is starting to take its role more seriously, and as debates over affordability continue to dominate campaigns around the country, we hope tariffs’ role in the issue leads candidates to think about tariffs’ impacts on prices and to take a stronger stance against the unilateral executive-run trade regime.
Section 232 provides authority for the executive branch to investigate whether importation of a particular product or products threatens national security. If an affirmative finding is made, the law grants the executive branch virtual carte blanche authority to impose import restrictions.
Section 201 provides authority to the International Trade Commission (ITC) to investigate whether a product is being imported in such increased quantities as to injure or threaten injury to the domestic industry. An affirmative finding by the ITC sends the matter (along with the Commission’s recommended course of action) to the president to fashion a remedy.
Section 301 provides authority for the US Trade Representative to investigate and respond to foreign acts, policies, or practices that violate trade agreements or are an unjustifiable, unreasonable, or discriminatory burden on US commerce. If an affirmative finding is made, the statute provides the president with broad latitude to impose trade restrictions.