Can the president just levy tariffs on any imported good? Don’t congress and senate have any say on this? Won’t China just take this to the WTO and get it overturned? If the US violates a WTO ruling will it get kicked out? What is the mechanism that prevents this, along with the “american made only” provisions of the stimulus package and clean energy bill, from turning into a nasty world economy crippling trade war?
The president can do it because there’s a treaty that says the president can do it. There’s a provision of the WTO treaty that says that member governments can impose temporary tariffs against products to counter a surge from another country that would lead to disruption in the domestic industry.
In other words, if China suddenly exports a lot of tires to the US and that hurts US tire manufacturers, the president can put a tariff on Chinese tires.
Whether that’s wise or not is another question. But he’s legally authorized to do it, under the terms of the WTO.
That makes sense, thanks.
There isn’t one - loads of countries have implemented protectionist measures recently because of the recession, including the US. What prevents them from going for all-out protectionism is the fact that complete free trade is up to 100 times more productive for everyone than complete protectionism. But as you’ve highlighted, because there’s no one with the authority to enforce free trade globally, it’s a bit of a prisoner’s dilemma situation.
It’s not the “president” per se that charges the extra duty, call “anti-dumping” duty, it’s the Department of Commerce. The duty is enforced by US Customs and Border Protection. The duties are deposited at the time of entry–it’s a percentage based on the value of the goods. These are extra duties over and above the prescribed rate of duty in the Harmonized Tariff System of the US (every country has their own), and can be well over 100%, based on the good and country of origin. However, these entries can stay in suspension for years (meaning the duties are deposited, but not billed), and the rate can go up or down at the time of liquidation by CBP on the orders of the DOC.
There are also a class of duties called “countervailing” duties. These are used to offset any help the foreign manufacturer receives from their government to keep their prices artificially low. There are some products that are charged both antidumping and countervailing duties, on top of the Customs duties proscribed in the Tariff system.
Countrypolitan–trade compliance-type person