Updated January 13, 2021
Presidential Authority to Address Tariff Barriers in Trade
Agreements
The U.S. Constitution grants Congress the power to
Timeline of Changes to Presidential Trade
regulate trade with foreign nations and to lay and collect
Agreement Proclamation Authorities
duties. Since the 1930s, Congress has periodically
authorized the President to negotiate trade agreements and,
1934 Section 350(a) of the Reciprocal Trade Agreements Act
among other actions, proclaim changes to U.S. tariff rates–
of 1934 authorized the President to negotiate bilateral,
known as Trade Promotion Authority (TPA). Currently,
reciprocal trade agreements and proclaim changes to
Section 103(a) of the Bipartisan Congressional Trade
U.S. tariff rates of up to 50% of existing rates without
Priorities and Accountability Act of 2015 (TPA-2015)
further congressional action. Renewed 11 times.
authorizes the President to enter into trade agreements with
1962 Section 201 of the Trade Expansion Act of 1962, like
foreign countries to reduce “duties or other import
the RTAA, authorized the President to enter into trade
restrictions” that the President determines are “unduly
agreements and proclaim changes to U.S. tariff rates of
burdening and restricting” the United States’ foreign trade
up to 50% of existing rates. Additionally, Section 201
and to proclaim limited changes to U.S. tariff rates without
placed no limits on presidential reductions in tariff
further congressional action. In December 2020, President
rates that were already less than 5%.
Donald Trump implemented a trade agreement with the
1975 Section 101 of the Trade Act of 1974 authorized the
European Union regarding tariff barriers using his
President to proclaim reductions in U.S. tariff rates of
proclamation authority under Section 103(a).
up to 60% of existing rates (with no limits on rates
already below 5%) and to increase tariffs by up to 20%
This authority is currently set to expire in July 1, 2021.
of existing rates. While this authority expired in 1979,
History of Authority
Section 124(a) provided limited residual authority for
an additional two years.
Section 103(a) of TPA-2015 is the most recent
congressional delegation of authority to the executive
1988 Section 1102(a) of the Omnibus Trade and
branch to negotiate trade agreements and proclaim
Competitiveness Act of 1988 authorized the President
adjustments to customs duties. The first instance was the
to proclaim reductions in U.S. tariff rates of up to 50%
Reciprocal Trade Agreements Act of 1934 (RTAA). Passed
of existing rates (with no limits on rates already below
in the midst of the Great Depression, the RTAA authorized
5%). The 1988 Act limited the President’s ability to
the President “to enter into foreign trade agreements with
increase tariffs as part of such an agreement. Several
foreign governments” and to proclaim, without further
new technical limitations were also introduced.
congressional action, limited modifications to U.S. customs
2002 Section 2103(a) of the Trade Act of 2002 authorized
duties and import restrictions. Over the next several
the President to proclaim reductions in U.S. tariff rates
decades, presidents negotiated dozens of bilateral trade
of up to 50% of existing rates (with no limits on rates
agreements addressing tariff barriers and implemented
already below 5%). Several new technical limitations
those agreements by proclamation. While the RTAA was
were also introduced.
primarily used for bilateral agreements, President Harry
2015 Section 103(a) of the Bipartisan Congressional Trade
Truman negotiated and implemented by proclamation the
Priorities and Accountability Act of 2015 authorizes
multilateral General Agreement on Tariffs and Trade
the President to proclaim reductions in U.S. tariff rates
(GATT—the precursor to the World Trade Organization)
of up to 50% of existing rates (with no limits on rates
using RTAA authority.
already below 5%). Several new technical limitations
were also introduced.
By the late 1960s, nontariff barriers (e.g., regulatory
barriers or subsidies) had become the focus of multilateral
The result was a bifurcation in trade negotiating authority
trade negotiations. Rather than authorize the President to
between agreements affecting tariff barriers and those
proclaim nontariff-related changes to U.S. law, Congress
affecting both tariffs and nontariff barriers. Since 1974,
enacted the Trade Act of 1974, which added procedures
TPA has provided authority both to negotiate and to
through which the President could negotiate agreements
implement limited agreements addressing tariff barriers
addressing such barriers and obtain expedited consideration
without congressional approval. Section 103(b) of TPA-
of implementing legislation in Congress if certain criteria
2015 provides authority to negotiate agreements addressing
were met. Alongside these new procedures, Congress
tariff and nontariff barriers, and sets out the procedures to
continued to authorize the President to negotiate and
implement those agreements with congressional approval.
implement agreements addressing only tariff barriers
Most recent U.S. FTAs have covered tariffs and nontariff
without further congressional action.
barriers and have therefore been negotiated under Section
103(b)’s procedures.
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Presidential Authority to Address Tariff Barriers in Trade Agreements
Use of 103(a) and Precursor Authority
Agreement on Duty-Free Treatment of Multi-Chip
Since the Trade Act of 1974, Presidents have often used
Integrated Circuits (2006)
their proclamation authority in the context of
In 2005, the European Union, Japan, South Korea, the
comprehensive agreements to implement changes to tariff
United States, and Taiwan agreed to reduce the rate of all
barriers, while relying on implementing legislation to effect
customs duties on multi-chip integrated circuits to zero on a
changes to nontariff barriers. For example, during the
most-favored-nation (MFN) basis (i.e., the principle that a
GATT Tokyo Round of multilateral trade negotiations
country should not discriminate among its trading partners).
(1973 to 1979), President Jimmy Carter relied upon his
President George W. Bush notified Congress of his
proclamation authority to implement preliminary and final
intention to enter into the agreement, citing authority under
agreements on tariffs (Proclamation 4707), but
Section 2103(a) of the Trade Act of 2002. On March 31,
implemented agreements addressing nontariff barriers
2006, President Bush issued Proclamation 7995, which
through the Trade Agreements Act of 1979 (P.L. 96-39).
modified the U.S. Harmonized Tariff Schedule (HTS) to
reflect the terms of the agreement.
Presidents have occasionally made use of their authority to
negotiate and implement limited trade agreements
Asia-Pacific Economic Cooperation Agreement on
addressing only tariff barriers. For example, in 1979,
Environmental Goods (2015)
President Carter entered into a trade agreement with Canada
In 2012, leaders of the 21 Asia-Pacific Economic
to reduce tariff rates on certain live cattle imports. President
Cooperation (APEC) economies agreed to reduce applied
Carter used his proclamation authority to implement that
tariff rates to 5% or less by the end of 2015 on 54
agreement (Proclamation 4808) without further
environmental goods on a MFN basis. On December 23,
congressional action.
2015, President Barack Obama issued Proclamation 9384,
which modified the HTS to reflect the terms of the
Trade Agreements Implemented in Part
agreement. In the Proclamation, President Obama cited
with Proclamation Authority Since 1974
Section 103(a) of TPA-2015 and Section 502 of the
Protecting Americans from Tax Hikes Act of 2015 as
1978 GATT Tokyo Round Bilateral Agreements, Staged
authority, the latter of which explicitly authorized the use of
Reductions, and Geneva Protocol (U.S.-India, U.S.-
the proclamation authority provided for in Section 103(a) to
Mexico, U.S.-Romania, U.S.-Hungary, U.S.-Taiwan, U.S.-
implement an agreement by APEC members on
Indonesia, U.S.-Trinidad and Tobago, U.S.-Cartagena
environmental goods.
Agreement Countries, U.S.-Switzerland, U.S.-European
Communities) (Procl. 4600, 4694, 4707, 4711, 4768)
U.S.-Japan Trade Agreement (2019)
1978 U.S.-Finland (Procl. 4630)
In October 2019, the United States entered into a trade
1980 U.S.-Canada (Procl. 4808)
agreement with Japan, which was negotiated and
1981 U.S.-Japan (Procl. 4889)
implemented under Section 103(a). U.S. commitments in
the agreement included, among other things, the reduction
1982 U.S.-Taiwan (Procl. 4980)
or elimination of tariffs on 241 tariff lines, including 42
1989 Compact of Free Association with the Marshall Islands
agricultural products ($7.2 billion of U.S. imports), and,
and the Federated States of Micronesia (Procl. 6030)
importantly, modifications to the U.S. global tariff-rate
1992 Provisional Agreement on Certain Tropical Products
quota for imports of Japanese beef. Some Members of 116th
(Procl. 6515)
Congress expressed concern over the agreement’s scope
and the use of 103(a) to implement it, which differs from
1993 North American Free Trade Agreement (NAFTA)
prior U.S. FTA practice. Such concerns have focused on
(Tariff Provisions Only) (Procl. 6641)
whether Section 103(a) authorizes the President to go
1994 Uruguay Round Agreements (Tariff Provisions Only)
beyond cutting tariff rates to modify quotas and create rules
(Procl. 6763, 6780)
of origin.
1995 Tariff-Rate Quota on Tobacco (Procl. 6821)
2006 Agreement on Duty-Free Treatment of Multi-Chip
U.S.-EU Trade Agreement (2020)
Integrated Circuits (Procl. 7995)
In November 2020, the United States entered into a trade
agreement with the European Union, which was negotiated
2015 Asia-Pacific Economic Cooperation Agreement on
and implemented under Section 103(a). The agreement
Environmental Goods (Procl. 9384)
included the reduction of tariffs on 11 tariff lines, which
2019 U.S.-Japan (Procl. 9974)
include, among other products, certain prepared meals,
2020 U.S.-EU (Procl. 10128)
certain crystal glassware, surface preparations, propellant
powders, cigarette lighters, and lighter parts. The reductions
Recent Uses
were implemented on a MFN basis and are retroactive to
Since the 1970s, Presidents have generally used Section
August 1, 2020.
103(a) of TPA-2015 and its precursor authorities to modify
tariff rates, as part of more comprehensive multilateral trade
Christopher A. Casey, Analyst in International Trade and
negotiations, such as the proposed United States-Mexico-
Finance
Canada Agreement (USMCA). Nevertheless, there have
Brandon J. Murrill, Legislative Attorney
been recent instances of Presidents entering (or notifying
Congress of their intent to enter) into limited bilateral trade
IF11400
agreements under Section 103(a).
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Presidential Authority to Address Tariff Barriers in Trade Agreements


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https://crsreports.congress.gov | IF11400 · VERSION 3 · UPDATED

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