It's Not a Law Just Because it Passes

Protectionism is lurking and ready to rear its ugly head again. It looks like the Schumer-Graham China tariff bill—which proposes a 27.5% tariff on all imported Chinese goods—will come to vote this week and has sufficient support to pass through the Senate. Yet, there are compelling reasons why the bill will not become law.

For starters, this is a revenue bill, and the House ardently guards its constitutional right to initiate revenue legislation. The House, which must also approve any bill, has shown little enthusiasm for Schumer's tariff approach and already passed its own China bill earlier this year. In addition, Congress adjourns at the end of this week until after the election in November. By that time, political support for such draconian measures will likely dissipate.

The escalation of the bill smells of election-year politics—politicians playing on overwrought fears of Chinese foul play. While we abhor protectionism as much as the next capitalist, we see a low probability of this measure becoming law.