On Wednesday U.S. policymakers moved to pass legislation that would limit the president’s power to introduce import taxes for reasons of national security. The suggested legislation comes on the heels of increased concerns that President Trump’s trade policies will have a high cost for U.S. businesses and the U.S. economy. The legislation, called the Bicameral Congressional Trade Authority Act, was introduced in both the Senate and the House of Representatives, and would require congressional approval before the president could implement tariffs and quotas under Section 232 of the Trade Expansion Act of 1962 (the section that allows for tariffs based on security issues). The law currently allows a U.S. president to implement these tariffs without congressional approval, and Trump’s efforts to do so have wrought havoc on internal relations and global relationships, as well as on the global economy.
Sponsors of the proposed legislation have highlighted U.S. industries that are already hurting because of Trump’s tariff plans, such as craft beer and agricultural industries. They highlight the need to protect domestic businesses and to prevent the president from implementing tariffs that would cause more harm. President Trump has threatened to implement more tariffs with China if a new trade deal isn’t reached in the coming weeks.
Though the legislation hasn’t passed yet, it could bring a new stability to the global markets, whose 2019 outlook has been weakening consistently in recent weeks.
Market Movements
The U.S. dollar was weaker on Thursday afternoon in Asia, with the dollar index falling 0.-06 percent to 95.28 .DXY. The greenback eased against the yen, falling 0.22 percent to 108.78. It also eased against the euro, the pound, and the Canadian dollar. The weakened dollar came on the heels of a dovish outlook from the Federal Reserve, whose two-day policy meeting concluded on Wednesday.
Wall Street indexes soared on Wednesday, with the NASDAQ closing up 2.20 percent and the Dow Jones Industrial Average up 1.77 percent. The S&P 500 closed up 1.55 percent.Asian markets were broadly higher on Thursday, with Chinese benchmarks being the only ones trading lower. Japan’s Nikkei 225 was up 1.06 percent as of 2:46 p.m. HK/SIN, after struggling through several days of losses. Hong Kong’s Hang Seng Index was up 0.91 percent, while South Korea’s Kospi was a modest 0.08 percent higher.