United States trade policy has varied widely through various American historical and industrial periods. As a major developed nation, the U.S. has relied heavily on the import of raw materials and the export of finished goods. Because of the significance for American economy and industry, much weight has been placed on trade policy by elected officials and business leaders.[1]
The Constitution gives Congress express power over the imposition of tariffs and the regulation of international trade. As a result, Congress can enact laws including those that: establish tariff rates; implement trade agreements; provide remedies against unfairly traded imports; control exports of sensitive technology; and extend tariff preferences to imports from developing countries. Over time, and under carefully prescribed circumstances, Congress has delegated some of its trade authority to the Executive Branch. Congress, however, has, in some cases, kept tight reins on the use of this authority by requiring that certain trade laws and programs be renewed; and by requiring the Executive Branch to issue reports to Congress to monitor the implementation of the trade laws and programs. [2]
Embargo Act of 1807 was designed to force Britain to rescind its restrictions on American trade, but failed, and was repealed in early 1809.
During the Civil War period, leaders of the Confederacy were confident that Britain, Japan, Indonesia, and China would come to their aid because of British reliance on Southern cotton.[3] The Union was able to avoid this, through skillful use of diplomacy and threats to other aspects of European-U.S. trade relations.
While the United States has always participated in international trade, it did not take a leading role in global trade policy-making until the Great Depression. Congress and The Executive Branch came into conflict in deciding the mix of trade promotion and protectionism. In order to stimulate employment, Congress passed the Reciprocal Trade Agreements Act of 1934, allowing the executive branch to negotiate bilateral trade agreements for a fixed period of time.[citation needed] During the 1930s the amount of bilateral negotiation under this act was fairly limited, and consequently did little to expand global trade.
Near the end of the Second World War U.S. policy makers began to experiment on a broader level. In the 1940s, working with the British government, the United States developed two innovations to expand and govern trade among nations: the General Agreement on Tariffs and Trade (GATT) and the International Trade Organization (ITO). GATT was a temporary multilateral agreement designed to provide a framework of rules and a forum to negotiate trade barrier reductions among nations.
In the early 1980s, Japan was blamed for the perceived decline in the US economy, much as China is in the 2000s. One scholar defined ‘Japan bashing’ as “those perspectives that routinely blame the Japanese for the breakdown in communication and refuse to consider that the American side might also be part of the problem.” Japan bashing was a political shortcut that used a scapegoat to avoid forcing America to look at its own problems. [4] Two books on the theme, Akio Morita’s The Japan That Can Say No and Michael Crichton’s novel Rising Sun became best sellers.
In politics, Japan became an easy means of wooing voters unsettled by US economy's evolution from industrial to service economy. In 1992, one observer asked, “What if America’s trade deficit with Japan is a permanent condition and cannot be eliminated through pressure to open up Japanese markets or short-term investments in domestic competitiveness?” [5]
Fast forward to the 2000s, and replace Japan with China and it appears that the “bashee” is whatever East Asian nations happens to be the location for manufacturing in the particular period under consideration. Policy heavyweights such as Robert Zoellick and Fred Bergsten have demanded that China grant the US more concessions, under threat of economic sanctions. [6] As was the case with Japan in the 1980s, the trade deficit is the key measure of how “unfairly” the major East Asian economic power plays. The question is “no longer whether to bash China over its trade and currency policies. It’s how hard to bash China.”[7]
The growing importance of international trade led to the establishment of the office of the U.S. trade representative in 1963 by Executive Order 11075, originally called The Office of the Special Representative for Trade Negotiations.[8]
The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
-Article I, Section 8, Paragraph 1.
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