Since 1974, federal law generally has prohibited the export of American oil. The law bans such exports even though the Export Clause of the U.S. Constitution provides that Congress can impose “No Tax or Duty” “on Articles exported from any State.” (Art. I, §9, cl. 5.) The higher a tariff is, the more it discourages exporting the good. A total ban on oil exports is equivalent to a tax of infinity.The history of the Export Clause shows that Congress can no longer justify this ban. When the Framers drafted our Constitution in 1787, the South expressed concern that the North would tax the export of cotton, which was the South’s major cash crop.
The South wanted to keep its markets open to the world. James Madison proposed that Congress could impose an export tax, if a super-majority in Congress approved. The South objected that such a restriction was insufficient protection because the more populous North might still be able to impose an export duty. The South did agree that a simple majority could impose a tax on imports but the North had to agree that there must be no tax on exports. While this constitutional restriction in the Export Clause initially favored the South, its principle applies without regard to geographic region. For example, in an effort to make aluminum or steel cheaper, Congress may not impose a tax on their export.
