The shifting political landscape in Washington following the Democratic takeover of Congress has set the stage for a significant confrontation over the executive branch’s use of unilateral trade penalties. Trade experts and legal analysts suggest that the new legislative session may represent the most serious challenge to presidential tariff authority in decades. As lawmakers from both parties express growing concern over the economic impact of aggressive trade enforcement, businesses are being advised to closely monitor a trio of legislative proposals that could fundamentally alter how duties are imposed and reviewed.
Under the current legal framework, the executive branch enjoys broad discretion to implement trade barriers without immediate congressional approval. President Donald Trump has utilized several key provisions of U.S. trade law to reshape global commerce, most notably Section 232 of the Trade Expansion Act of 1962, Section 301 of the Trade Act of 1974, and the rarely invoked Section 338 of the Tariff Act of 1930. These tools have been used to impose a 50% levy on steel and aluminum imports from Canada and Mexico, as well as tariffs ranging from 10% to 12.5% on a vast array of goods from 60 different trading partners. Furthermore, Section 338 was recently employed to target a wide range of Canadian products with a 50% tariff, a move that has sent shockwaves through North American supply chains.
The Legislative Counteroffensive: Three Key Bills
While the executive branch has historically operated with a free hand in trade matters, the new Congress is moving to reassert its constitutional authority over foreign commerce. Mark Ludwikowski, chair of Clark Hill’s International Trade Practice, points to three specific bills that could serve as "additional leverage" to force the administration into a more flexible posture.
The first, S. 5390, known as the End Trump’s Tariff Tax Act, was introduced by Senator Chuck Schumer (D-NY). This bill specifically targets the use of Section 338 authority. It seeks to repeal the section entirely and terminate the heavy levies placed on Canadian goods. The administration had justified these tariffs by claiming Canada discriminated against U.S. commerce in the sectors of alcoholic beverages, dairy products, and motor vehicles. Perhaps most significantly for the private sector, S. 5390 includes a provision requiring U.S. Customs and Border Protection to refund all covered duties, with interest, within 30 days of the bill’s enactment.
The second major piece of legislation is S. 1272, the Trade Review Act of 2025. Introduced by Senator Maria Cantwell (D-WA) and co-sponsored by Senator Chuck Grassley (R-IA), this bipartisan bill focuses on transparency and oversight. If passed, the president would be required to notify Congress within 48 hours of any tariff increase, providing a detailed rationale and an economic appraisal of the potential effects on U.S. consumers and businesses. Crucially, any such tariffs would automatically expire after 60 days unless Congress passes specific authorizing legislation that is subsequently signed into law.
The third pillar of this legislative effort is H.R. 7557, the Respect NATO Allies Act. Introduced by Representatives Linda Sánchez (D-CA) and Mike Turner (R-OH), this bill would require both the House and the Senate to approve any new trade restrictions on imports from NATO member states before they could be implemented. This would cover new tariffs, increased duties, and reductions in import quotas, though it would exclude traditional antidumping and countervailing duty cases.
Chronology of Trade Escalation and Legislative Response
The current friction is the result of a multi-year escalation in trade enforcement that began with the invocation of Section 232 national security justifications.
- Early Implementation: The administration first utilized Section 232 to target global steel and aluminum imports, arguing that the decline of domestic production capacity threatened national security. While initial exemptions were granted to certain allies, these were later rescinded or replaced with restrictive quotas.
- Expansion to Section 301: The scope of trade actions broadened with Section 301 investigations into intellectual property theft and unfair trade practices. This led to multiple "lists" of products from dozens of trading partners being hit with double-digit tariffs.
- February 12, 2025: Reps. Sánchez and Turner introduced H.R. 7557 in response to rising tensions with European and North American allies.
- April 3, 2025: Senator Cantwell introduced the Trade Review Act, signaling a bipartisan desire to curb executive overreach.
- September 14, 2025: Senator Schumer introduced the End Trump’s Tariff Tax Act, specifically aiming to roll back the 50% tariffs on Canadian goods.
- Present Day: The transition to a Democrat-led Congress has provided these bills with renewed momentum, as committee chairs prepare to hold hearings on the cumulative economic impact of these trade policies.
Economic Data and the Cost of Protectionism
The push for legislative reform is driven in large part by the mounting economic data regarding the cost of these duties. While the administration argues that tariffs protect domestic industry and provide bargaining chips for negotiations, the "landed cost" for U.S. importers has risen sharply.
According to data analyzed by trade economists, the 50% tariffs on steel and aluminum have significantly increased the cost of raw materials for the U.S. automotive, aerospace, and construction sectors. Furthermore, the broad Section 301 tariffs have affected more than $300 billion worth of annual imports, contributing to inflationary pressures in the consumer electronics and home appliance markets.
In the agricultural sector, retaliatory tariffs from trading partners have led to a decrease in U.S. exports of soybeans, pork, and dairy, necessitating billions of dollars in federal subsidies to keep domestic farmers afloat. This "circular economy" of tariffs and subsidies has drawn criticism from fiscal conservatives and trade liberals alike, who argue that the policy creates market distortions and increases the national debt.
Expert Analysis: The Path Forward in a Divided Government
The primary challenge for the new Congress remains the presidential veto. Even if the proposed bills pass both chambers, they would require a two-thirds majority to override a veto from the White House. Jonathan Todd, co-lead of the transportation and logistics practice at Benesch, notes that while a veto override is a high bar, the political pressure is mounting.
"There is a lot more behind tariff and trade policy that is bipartisan than many people would believe," Todd said. He noted that even Republican lawmakers in manufacturing-heavy districts are hearing from constituents about the rising costs of inputs. "Many sectors and the public are clearly unhappy with the current state and trajectory of trade policy, so there’s certainly the potential for change as this Congress winds down and a new Congress comes to power."
Blake Harden, a managing director at EY’s Washington Council practice, suggests that Congress may use "the power of the purse" if legislative changes are blocked. By utilizing the appropriations process, lawmakers can restrict the funding available to agencies for the implementation of certain trade enforcement actions or demand more rigorous reporting and transparency as a condition for funding.
"They can use the power of the purse to try to influence what’s going on in the administration," Harden explained. This could include holding high-profile hearings to question the Secretary of Commerce or the U.S. Trade Representative, effectively putting the administration on the defensive regarding its trade strategy.
Implications for Supply Chain Management and Business Strategy
For businesses, the uncertainty of trade policy requires a proactive rather than a reactive approach. Trade lawyers emphasize that even if Congress succeeds in rolling back some tariffs, the process will be slow and subject to legal challenges.
Mark Ludwikowski advises firms to meticulously document the impact of tariffs on their operations. This includes tracking tariff-affected products, verifying Harmonized Tariff Schedule (HTS) classifications with customs brokers, and seeking formal exclusions where possible. Documenting the specific sales effects and cost increases is essential for companies that may later seek to benefit from refund provisions like those found in S. 5390.
Jonathan Todd recommends that companies perform a deep dive into their "landed costs"—the total price of a product or shipment once it has arrived at a buyer’s doorstep, including duties, taxes, and shipping. He also suggests that companies consider shifting some finishing or light manufacturing processes to the U.S. to change the country of origin for their goods, thereby avoiding certain import duties.
"Mapping supply chains to understand origins and inputs that carry tariffs is no longer optional," Todd said. "It is a core component of risk management in the current environment."
Broader Geopolitical and Strategic Impact
The outcome of this legislative struggle will have profound implications for U.S. foreign policy. The Respect NATO Allies Act, in particular, highlights a growing concern that trade disputes are undermining traditional security alliances. By requiring congressional approval for tariffs on allies, lawmakers are attempting to decouple trade friction from broader geopolitical cooperation.
If the Trade Review Act of 2025 were to become law, it would represent a historic pivot away from the trend of delegating trade authority to the president—a trend that has been consistent since the Reciprocal Trade Agreements Act of 1934. This would force the executive branch to build broader consensus before using trade as a tool of economic statecraft, potentially leading to more stable but less agile trade policies.
As the new Congress settles in, the focus will remain on whether a bipartisan coalition can hold together long enough to challenge the status quo. For global markets and domestic industries, the stakes could not be higher, as the future of the North American trade relationship and the stability of global supply chains hang in the balance of this legislative tug-of-war.
