Congress Avoids a Shutdown — and Gives Trump More Tariff Power Against Canada and Mexico
- Miguel Virgen, PhD Student in Business
- Mar 17
- 7 min read
March (Doctors In Business Journal) - On Friday evening, Congress successfully passed a bill that avoided a government shutdown, ensuring the federal government would remain funded through the end of September at spending levels similar to those in the 2024 fiscal year. The passage of the bill was a welcome relief for government workers and citizens alike, as the looming threat of a shutdown had raised concerns about the potential disruption of essential government services. However, embedded within the legislation was a provision that significantly strengthened former President Donald Trump’s ability to impose tariffs on goods coming from Canada and Mexico, signaling a shift in trade relations that could have long-lasting economic consequences.
The passage of this bill was not without drama. Senate Democrats had been speculating about a potential filibuster, which would have sent the government into a protracted shutdown under the Trump administration, potentially leading to a reduction in the size of the federal workforce and other radical measures. Instead, the legislation moved forward, but not before Congress made a critical decision that allows Trump to maintain emergency tariff powers over trade with neighboring countries.
This article explores the key components of the legislation that avoided a government shutdown, the provisions granting Trump more tariff authority, the broader political implications of these developments, and the potential long-term effects on U.S. trade policy, particularly with Canada and Mexico.
Avoiding the Shutdown: The Politics Behind the Bill’s Passage
On the eve of a potential government shutdown, both chambers of Congress scrambled to find a solution that would prevent the closure of federal offices and services. The Senate’s passage of the funding bill marked a significant moment in the political saga, as it allowed for the continuation of federal operations without a prolonged crisis.
The bill passed by the Senate includes funding levels in line with the 2024 fiscal year, which means that the current levels of government spending remain intact until the end of September. This temporary funding measure was seen as a compromise between the different factions of Congress. On one hand, Republicans sought a more aggressive reduction in government spending, aiming to fulfill long-standing fiscal conservative goals. On the other hand, Senate Democrats, mindful of the potential political fallout from a government shutdown, were determined to avoid the devastating impacts on federal workers and services.
The Threat of a Shutdown Under Trump’s Watch
One of the more significant concerns surrounding the potential shutdown was the prospect of the Trump administration’s handling of it. While many hoped that the shutdown would be short-lived, there were fears that Trump’s approach to governance could make the situation much more chaotic. During his presidency, Trump was known for his aggressive stance on reducing the size of the federal government, which included an emphasis on downsizing the federal workforce through executive orders and other measures. A prolonged shutdown under Trump’s leadership could have paved the way for further cuts to the government’s workforce, potentially making it harder for federal agencies to function at full capacity.
The political gridlock had reached a fever pitch in the days leading up to the vote. Senate Democrats had reportedly discussed the possibility of filibustering the bill, which would have sent the government into a full shutdown. Given the contentious nature of the negotiations and the divide between the two parties, it was unclear whether the government could avoid a long and unpredictable shutdown. Yet, with time running out, both parties ultimately struck a deal, passing the bill with the necessary votes to keep the government funded and operational.
However, while the immediate threat of a shutdown was avoided, the legislation contained a critical provision that has far-reaching implications for U.S. trade relations, particularly with its two closest neighbors, Canada and Mexico.
Trump’s Expanded Tariff Powers
One of the most controversial elements of the bill passed by Congress is the provision granting former President Donald Trump more authority to impose tariffs on imports from Canada and Mexico. While tariffs are typically a tool used by the U.S. government to influence trade policy and protect domestic industries, this provision essentially gives Trump the power to unilaterally impose tariffs without seeking further approval from Congress.
The provision blocks Congress from voting to end Trump’s emergency tariff powers, essentially allowing him to continue leveraging tariffs as a means of exerting pressure on the economies of Canada and Mexico. This measure has sparked significant debate, as many critics argue that granting Trump such expansive powers could undermine the principle of Congressional oversight and give one individual an outsized influence over U.S. trade policy.
The Precedent for Emergency Powers
The roots of Trump’s expanded tariff powers lie in the emergency powers granted to the president during the trade war with China. In 2018, the Trump administration used emergency powers to impose tariffs on Chinese goods as part of its broader strategy to reduce the U.S. trade deficit and push China to address what it deemed unfair trade practices. While the tariffs were heavily criticized for their impact on U.S. consumers and businesses, Trump argued that the economic pressure was necessary to protect American interests.
Now, with the new provision embedded in the funding bill, Trump could potentially extend this strategy to Canada and Mexico, two of the U.S.'s largest trading partners. This move has prompted concerns about the potential for a new trade war, with experts warning that imposing tariffs on these countries could result in retaliatory measures, leading to higher prices for U.S. consumers and greater uncertainty for businesses that rely on cross-border trade.
The Implications for U.S.-Mexico-Canada Trade Relations
The bill’s provision granting Trump more tariff power could significantly affect U.S.-Mexico-Canada trade relations. Under the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA), there are rules and guidelines governing trade between the three nations. The agreement was designed to promote trade and investment, reduce trade barriers, and ensure fair competition. However, with the provision in this funding bill, the Trump administration could use tariffs as a tool to bypass the spirit of the USMCA and unilaterally impose tariffs that could disrupt the flow of goods between the U.S., Canada, and Mexico.
For example, if Trump were to impose tariffs on Canadian steel or Mexican agricultural products, it could prompt retaliatory tariffs, impacting U.S. industries that rely on imports from these countries. The effects could be felt in sectors ranging from agriculture to manufacturing, as U.S. companies face higher costs for imported goods and raw materials. In turn, consumers could face higher prices at the checkout, with essential goods becoming more expensive.
The Political Implications of Expanding Tariff Powers
The provision granting Trump more tariff power has significant political implications, particularly as it relates to the balance of power between Congress and the executive branch. In a democratic system of government, it is crucial for Congress to maintain oversight over the actions of the president, especially when it comes to trade policy. By blocking Congress from voting to end Trump’s emergency tariff powers, the legislation raises questions about the erosion of Congressional authority in favor of executive overreach.
For many Democrats, this provision is a major point of contention. While they were willing to pass the bill to avoid a shutdown, they were not happy about conceding such significant power to a former president. The provision allows Trump to act unilaterally, bypassing the checks and balances that are supposed to exist between the legislative and executive branches of government. This shift in power has led to concerns about the long-term consequences of such a move, with critics warning that it could set a dangerous precedent for future administrations.
Republican Support and the Future of Trade Policy
On the other side of the aisle, Republicans argue that the provision is a necessary tool for protecting American industries from unfair foreign competition. Many Republicans have long advocated for stronger trade policies that prioritize American workers and industries, and the expanded tariff powers align with their broader economic agenda. By giving Trump more leverage over trade negotiations with Canada and Mexico, Republicans believe that the U.S. will be better positioned to secure favorable trade deals and reduce the trade deficit.
However, this approach has its risks. While tariffs may benefit certain industries in the short term, they can also harm consumers and create economic instability. The long-term effects of escalating tariffs on neighboring countries could exacerbate tensions in North American trade relations and undermine the progress made under the USMCA. As the U.S. continues to grapple with its position in the global economy, it remains to be seen whether the expansion of executive power in trade policy will ultimately benefit or harm American consumers and businesses.
Conclusion: A Government Shutdown Avoided, but Uncertainty Looms
Congress’s passage of the funding bill that avoided a government shutdown was a crucial step in maintaining stability within the federal government. The bill ensures that government operations will continue through the end of September at current spending levels, which was a necessary move to prevent the financial and logistical chaos of a shutdown.
However, embedded within the legislation is a provision that gives former President Trump significant power to impose tariffs on imports from Canada and Mexico. This move could have serious implications for trade relations between the U.S. and its neighbors, leading to potential economic disruptions and greater uncertainty for businesses and consumers. The provision has sparked controversy, raising questions about the balance of power between the executive branch and Congress and the long-term effects on U.S. trade policy.
As the political landscape continues to evolve, the question remains: will the expanded tariff powers granted to Trump lead to a new era of trade wars and economic instability, or will it ultimately help protect American industries and create a more competitive global economy? Only time will tell, but for now, the immediate threat of a government shutdown has been averted, and the battle over trade policy and executive authority is far from over.
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