MarketWatch photo illustration/Getty Images, iStockphoto With the American trade war careening closer to the cliff, the fate of the world’s economy may be determined by just one man: President Donald Trump.
Like the Chosen One, Trump has the whole world’s economy in his hands — and that’s frightening, because nobody should be that powerful, especially someone who holds the world in such low regard.
While not everything going wrong in the global economy can be laid at Trump’s door, his trade war with China could be the thing that tips it over. If the tit-for-tat tariff war does escalate, it could lead to a global recession, economists warn, potentially costing tens of millions of jobs and trillions in wealth around the globe. It’s a high-stakes gamble.
Never before has one man had so much sway over the livelihoods of 7.7 billion people.
And most of those 7.7 billion people might be wondering: Who the hell elected him king? Even some Americans who voted for him are wondering the same thing.
King of America
Make no mistake, Donald Trump is acting as if he’s the king of America.
He claims to have unilateral powers over war and peace, trade and taxes, immigration and the environment, and even over who qualifies as a citizen. He “jokes” about staying in office for more than two terms. He’s hired his family members for important jobs they aren’t qualified to hold, and he’s auctioned off government departments to the highest bidders or to sycophants.
Trump promised that he’d get Congress to work across the aisle, and strongly criticized Barack Obama for relying too much on executive orders. Those are just more promises left undone.
Trump has shown no interest in working with lawmakers to move legislation through Congress (even though his party controlled both chambers for the first two years). Only two major pieces of legislation have been passed, which means almost every decision is being made by Trump and his cabinet of corruption and incompetence. Trump is leaning on executive orders even more heavily than Obama did.
Sometimes Trump acts as if he’s king of the world. He’s dismissive of international organizations, such as the Group of Seven, the North Atlantic Treaty Organization, the World Trade Organization, the United Nations and the European Union. The only foreign leaders he gets along with are his fellow would-be kings: Vladimir Putin, Xi Jinping, Kim Jung Un, Mohammad bin Salman, Recep Erdogan.
Trump claims to be above the law. (He isn’t.) He says the Constitution gives him “the right to do whatever I want.” (It doesn’t.) More than any past president, Trump lives and breathes the axiom of Louis XIV: “L’etat c’est moi” — “I am the state.”
Farewell to kings
The men who founded this nation nearly 250 years ago feared one thing above all: That someday America would again be ruled by a tyrant. They had pledged their lives, fortunes and honor to the fight against one king, and they were determined to create a government that would protect the United States forever against another coming to power. They feared a populist demagogue.
They knew that power corrupts, and so they ratified a Constitution that would divide and dilute power. Their government was an intricately interlocked machine designed to balance the interests and powers of each branch, each institution, each faction against the others.
The founders were cynics, but they weren’t cynical enough.
Trump isn’t the first president to expand the powers of the executive, but he has taken presidential authority to the extreme.
It may surprise some people to learn that the Constitution grants the president very limited powers, with almost no role in setting tariffs, regulating commerce with foreign nations, setting the value of the dollar DXY, -0.01% BUXX, -0.02% or declaring war.
Article I of the Constitution is clear: Only Congress has the power to “lay and collect Taxes, Duties, Imposts and Excises.” Only Congress has the power to “regulate Commerce with foreign Nations.” Only Congress has the power to “establish an uniform Rule of Naturalization.” And Congress has the sole power to “coin Money, regulate the Value thereof, and of foreign Coin.” And the exclusive power “to declare War.”
For the most part, setting policy was supposed to be the job of the Congress as the representatives of the people and of the states, not the president’s. His duties are to execute the laws, not to rule unilaterally and without consultation.
The president’s role in policy under Article II is largely limited to vetoing legislation. He is commander in chief of the military, and has the power to negotiate treaties (with the advice and consent of the Senate). He also may recommend to the consideration of Congress “such Measures as he shall judge necessary and expedient.”
Nothing in there about being a king. Or about setting tariffs at whatever level he chooses. Or about prohibiting U.S. companies from doing business in foreign nations. Or enriching his businesses at every opportunity out of the public treasury. Or deciding which Americans are American enough.
Article I remedy
Fortunately, the U.S. Constitution provides a solution to America’s royal problem. Unfortunately, the Republicans who run the Senate — Mitch McConnell, above all — won’t act, either out of fear or out of a misplaced loyalty.
I’m not talking about impeachment; I’m talking about Congress taking back some of the powers that it has unwisely ceded to the president over the past 220 years.
Under current law, Trump can unilaterally set the tariff rate on any import from any country. He can unilaterally withdraw from trade agreements. He can use emergency powers to restrict imports, or seize foreign assets, with little oversight.
Many Republican senators are free-traders who fundamentally disagree with Trump’s strategies and tactics on trade. I’m not suggesting they adopt my beliefs, but that they take courage and act on their own principles, to do the right thing not only about trade but about preserving our Republic.
Veto-proof
It’s not enough, as former House Speaker Paul Ryan did, to denounce Trump’s authoritarian rule only after they’ve left office.
Many of these free-trading Republicans are from farm states, where the tariffs have hit particularly hard. Some have spoken out in strong terms, but none have broken with the president since the retirement of Arizona Sen. Jeff Flake earlier this year.
I’m talking about Republicans such as Sen. Chuck Grassley of Iowa, a seven-term senator, a soy bean farmer and the chairman of the Senate Finance Committee, which has exclusive jurisdiction over taxes (including tariffs). And Sen. Rob Portman of Ohio, the former U.S. trade representative. And Sens. Joni Ernst, Ben Sasse, Pat Toomey and Ted Cruz, and more.
Enough for a veto-proof majority if they joined with Democrats.
These Republicans fear that Trump could be squandering the good economy that is the best argument for his re-election next year (and the best guarantee of their own political prospects, of course).
Even McConnell has acknowledged that “there is not much support in my conference for tariffs, that’s for sure.” He said Republicans aren’t enthusiastic about “what would amount to a tax increase, frankly, on working-class people.”
They know the tariffs and uncertainty are hurting their constituents and America broadly. They could pass legislation that would end Trump’s trade war. It could all be fixed by the time the Federal Reserve next meets.
But, for now, these Republicans are hoping that the tariffs are just a negotiating gambit that will go away once Trump gets the deal he wants from China. For now, they’ll just have to keep riding the tiger and hope that the economy doesn’t throw them.
For now, they’ll let Trump rule like a reality-TV star playing Bonaparte, forgetting that this is reality, not TV, for 7.7 billion people.
Rex Nutting is a MarketWatch columnist.