Donald Trump’s recent announcement that he would discourage imports of steel and aluminum with new tariffs rests on precedents going back at least to the 1950s. But a careful look at the history of U.S. trade policy suggests that the president’s attempts to rationalize the protection of essential American industries based on “national security” portends a troubling expansion of executive authority.
Political turmoil in Iran in the early 1950s led to the loss of its oil to the world market. It also demonstrated the danger to major consuming countries of becoming dependent on supplies from a region marked by political instability.
The conflict in Iran provided much of the impetus for a 1954 presidential commission, headed by Inland Steel Company Chairman Clarence B. Randall, to examine the risks of relying on foreign imports of oil and other basic materials. The Randall Commission concluded that: (1) the question of when “freer trade would threaten the national security” should be determined by the Defense Department; and (2) the incremental costs to consumers of limiting imports to the needed level should be charged against the Defense budget. The dangers of relying on foreign oil were further underscored by major interruptions in supply from the 1956 Suez Canal crisis, the 1967 Arab-Israeli (Six-Day) War, and the Arab oil embargo launched in 1973.
Congress responded to the issue of import dependence by amending the Trade Agreements Extension Act in 1955 and 1958, and passing the Trade Expansion Act of 1962. It is Section 232 of the 1962 legislation that the Trump administration claims authorizes its new tariffs. These acts, though ostensibly about national security, had clear protectionist elements — not surprising, since House Speaker Sam Rayburn and Senate Majority Leader Lyndon Johnson led the effort to pass the legislation of the 1950s. The two Texans wanted to shield the American oil industry from foreign competition whose production costs were lower.
In 1959, Dwight Eisenhower used this new authority to issue regulations that placed strict caps on oil imports. His official explanation included the need to protect a vital domestic industry. But the details of the quotas on imports made clear the national security component of the president’s action. For instance, imports from Canada, whose oil could be safely transported over land were granted favorable treatment, whereas oil from the Middle East, where supplies were more precarious, were virtually banned from the American market.
Later, Richard Nixon wanted to change oil import priorities. His goal was to punish Canada, where he was feuding with Prime Minister Pierre Elliott Trudeau (father of the current Prime Minister), and to favor Iran, where he had a very cordial relationship with the Shah. But the Defense Department reminded him that U.S. national security policy regarded Canada as a relatively secure source of oil. Nixon eventually had to terminate all quotas on foreign oil in April of 1973, due to their role in domestic shortages and the declining competitiveness of American companies that were heavy users of oil.
One sign that the national security argument for Trump’s tariffs rests on shaky grounds is his original proposal, which disproportionately targeted Canada — exactly the opposite of what would be expected if national security was a genuine priority. Not surprisingly, Canada and Mexico were ultimately exempted in the official proclamations on steel and aluminum.
While administration lawyers might argue that these exemptions demonstrate its commitment to national security, the case is tainted by the president’s own assertions. Indeed, Trump has said that the exemptions are meant to provide leverage during the renegotiation of the North American Free Trade Agreement and will be slapped back on if neighboring countries do not agree to his terms. Negotiations with U.S. industries on other special exemptions could involve political tradeoffs. So the tariffs may not be about national security after all.
Overall, the White House has offered a muddled argument for the nexus between national security and its tariff policy. (The National Defense Industrial Association (NDIA) has warned that the tariffs may actually harm the U.S. military industrial base.) But the more fundamental problem is that Section 232 is a relic of the Cold War not well fitted for the world in which we live.
Through the 1980s, U.S. contingency planning rested on the assumption that a shooting war with the Soviet Union might actually break out and that enemy submarines might interdict vital commerce. Today, there is less reason to doubt the ability of the U.S. Navy to protect strategic sea lanes. When the presidents of the 1970s tried to slap tariffs on foreign oil, they could point to a recent embargo against the United States. Another such embargo on a vital commodity does not appear imminent.
The international commerce of the Cold War era was less interconnected than it is today. Current markets have more flexibility in dealing with unexpected developments. But interconnectedness also makes it possible to justify almost any import as a threat to the United States if it has military uses. Should we place tariffs on computers because the military needs them? On food, because our soldiers have to eat? The opportunities for executive mischief are almost endless, if we take an overly expansive view of Section 232 in the modern world.
There are other remedies to deal with the problems the president claims to address with his tariffs. These include set asides for the military if shortages of steel or aluminum appear unexpectedly. There are also established legal mechanisms for dealing with unfair trade practices. Trade creates more winners than losers, but the winners have been insufficiently attentive to the needs of workers adversely affected by foreign trade (and the growing use of robotics). It should also be remembered that, as the oil industry has demonstrated, the loss of protectionism is sometimes followed later by an industrial renaissance.
Congress has the authority to rein in Trump’s expansive view of Section 232. If it fails to act, it will be granting him — and future presidents — power to act in the name of “national security” even when the real reasons are only tenuously related.
Jay Hakes is a historian specializing in energy and the American presidency. He is the author of A Declaration of Energy Independence: How Freedom from Foreign Oil Can Improve National Security, Our Economy, and the Environment.