Short Stack: Presidential Power & Tariffs
How can the President unilaterally impose tariffs and launch an international trade war? Answer: The progressive expansion of executive power.
Despite receiving a petition signed by over a thousand economists urging a veto—while privately acknowledging concerns about its economic repercussions—Republican President Herbert Hoover signed the Smoot-Hawley Tariff Act into law on June 17, 1930.
That legislation raised tariffs on over 20,000 imported goods, with rates soaring as high as 60% for some agricultural products. While proponents argued it protected domestic industries, the act exacerbated existing economic challenges by triggering retaliatory tariff-trade wars, stifling global demand for American exports, and driving up consumer prices within the United States at precisely the moment large numbers of Americans were losing their jobs.
A full-blown economic crisis followed, now chronicled in the annals of history as the Great Depression.
Constitutional Source of Tariff Power
The Smoot-Hawley Act, while foolish, was constitutionally legitimate. Article I, Section 7 of the United States Constitution mandates that revenue bills originate in the House of Representatives, while Article I, Section 8 grants Congress exclusive power to “lay and collect taxes, duties, imposts, and excises.”
These terms, rooted in 18th-century economic thought, reflect distinctions articulated by Adam Smith in The Wealth of Nations (1776):
Duties: Broad taxes on imports, exports, or consumption.
Imposts: Taxes on imported goods—i.e. tariffs. Tariffs are imposts.
Excises: Internal taxes on production or sale of domestic goods.
The Constitution further empowers Congress to “regulate commerce with foreign nations” and enact laws “necessary and proper” to execute this authority. The President’s constitutional role is limited to signing or vetoing legislation that comes from Congress—not unilaterally imposing taxes or tariffs.
Progressivism & Executive Expansion
So how can a sitting President today unilaterally impose tariffs and possibly launch an international trade war? The answer is progressivism, which should not surprise readers of Zetetic Questions.