Which Branch of Government is Given Responsibility for Regulation of Trade?

Which branch of the U.S. Government controls trade is a common question. Although there are actually many departments of the government that involved in the regulation of trade, the simple answer to this question is Congress. It’s the Legislative Branch of the Government that is given the authority by the Constitution to regulate trade. The truth is though, that even that power is limited to a great extent.

Article 2, Section 8 of the United States Constitution defines the powers granted to Congress. The third clause is the section devoted to the regulation of trade. It states that the Congress shall have power:

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

In order to fully understand the intent and implications of the Commerce Clause (as it’s most commonly referred to), let’s break it down into its three parts.

To regulate Commerce with foreign Nations,…

This is pretty self explanatory and doesn’t require much explanation. The United States Congress has the authority to regulate commerce with other countries.

…and among the several States…

This is always the sticky part. This is the portion of the Commerce Clause that Congress attempts to use in order to justify regulation of everything that the Constitution does not specify. This is Congress’ “catch-all”, if you will. Take notice, however, that it says “among” the several states, not “within”. This is an important distinction.

“Among” is being used here specifically, as in “between”. How do we know this? Simple. It’s all in the Federalist Papers.

Quick History Lesson:

Our first Government was formed under the Articles of Confederation. After a few years, the States realized that is wasn’t working too well and called the Constitutional Convention with the intention of “correcting” the Articles. After much debate, the Founders realized that they would be better off starting over, and thus, our Constitution was born.

The problem with the Articles is that they were a little too close to anarchy, especially in the area of trade. The States were (and still are) all sovereign nations, but the Articles failed to provide any trade protections for them. If someone in Virginia was selling a product to someone is South Carolina, it would have to pass through North Carolina (assuming a land route). If North Carolina didn’t like that their neighbors were buying from Virginia instead of them, they could simply put a huge tax on the product to allow it to pass through their State (or more aptly, to prevent it). Similar instances were happening all over and it almost destroyed our nation before it ever got started.

That is the origin of the Commerce Clause and why it specifically says “among” the “States”. It provides protection to help guarantee free trade by giving Congress the power to regulate trade between States, not within them.

…and with the Indian Tribes;

This one is also self explanatory. Most Indian Tribes have integrated into American society over the last hundred years, so this portion of the Commerce Clause isn’t generally cited too often. Even for those Native Americans that still live as “independent nations”, trade is conducted within the States in the same fashion as with any other entity engaging in business, which usually is protected by State Commerce laws and doesn’t require Federal Trade Regulation.

So, that’s the long answer to the question.