Free Trade

Trump's Tariffs Made D.C. Swampier as Senators, Lobbyists Sought Special Favors for Connected Companies

Sen. Josh Hawley, a supporter of Trump's trade policies, lobbied to give a special exemption to a Missouri-based power tools manufacturer. Many other elected officials did too.

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When a Missouri-based power tool manufacturer was facing the prospect of higher costs due to new tariffs on imported saw blades, it turned to friends in high places for help—including Sen. Josh Hawley (R–Mo.).

Hawley has been an outspoken supporter of President Donald Trump's destructive trade policies. In fact, he's suggested that the president should have done more to dismantle the system of global trade. But Hawley was one of four members of Missouri's congressional delegation to sign onto a letter sent in September 2019 asking the U.S. trade representative to grant a special exemption for SM Products, which is based in Kansas City.

"It would not be beneficial to impair a small American company that does not have the financial resources or alternative supply chain options," the lawmakers wrote in the letter, which was obtained and published this week by the Wall Street Journal. Because SM Products had contracts locked-in months in advance, it had no choice but to eat the cost of the tariffs, they wrote, warning that "this cost will likely prevent SM Products from reaching profitability, thereby jeopardizing its future viability."

In short: China wasn't paying for the tariffs.

The tariff costs facing SM Products were also hitting many other American manufacturers since much of American manufacturing is dependent on the ability to import low-cost inputs from China and elsewhere. But while some companies were able to find members of Congress willing to lobby on their behalf before the unelected board of trade officials who get to decide which tariff exemptions to grant and which requests to ignore, most other American businesses were less fortunate.

As I reported in May 2018 when the Trump administration was first considering imposing tariffs on thousands of Chinese-made products, the U.S. International Trade Commission hearing was a five-day parade of business owners literally begging the federal government not to do it. One after another, for five minutes at a time, hundreds of business owners told the commission much the same thing that Hawley and his colleagues wrote in that letter: Tariffs would hurt their profitability. Contracts were already locked in and couldn't be altered at the drop of a hat. Alternative supply chains would take time and money to develop.

Once the tariffs were in place, the Trump administration set up a murky, confusing process for companies to request exemptions. It was, and is, a system that almost seems designed to be exploited by politically connected firms and individuals. Indeed, right from the start of the Trump trade wars, some major American steel manufacturers appeared to be exercising undue influence over the exemption process. Members of Congress have warned that the process lacks "basic due process and procedural fairness" and that it could be "abused for anticompetitive purposes." After two years, the government's own data suggest that's exactly what has happened.

Hawley's letter was hardly the only one. The Journal says it obtained more than 100 letters from members of Congress to the U.S. trade representative seeking special treatment for connected companies. "Some of these exclusions were granted, and many weren't. It's difficult to know if lobbying by Congress made a difference since the Trump Administration's approval process is a black box," the paper reports.

Under those circumstances, then, it should be no surprise that businesses that could afford to do so started hiring lobbyists to navigate the new tariff regime. The amount of money spent on lobbying work related to tariffs increased 900 percent as the trade war was getting started.

If you had the connections necessary to get a couple of members of Congress to write a letter to the U.S. trade representative on your behalf, as the owners of SM Products apparently did, you'd be foolish not to try that too. Most businesses, however, can't afford to hire lobbyists and don't have easy access to a sitting senator. They just have to pay the tariff bill.

These are all unintended but completely expected consequences of Trump's trade war and his poorly thought-through plan to use higher tariffs as a cudgel against China. Not only did Trump's trade policies run directly counter to his promises to "drain the swamp" by creating opaque bureaucracies that can decide the fates of small businesses all over the country, but they actually created incentives for the swamp to get even swampier.

In the warped reality the trade war helped to create, a company in Kansas City might not succeed or fail based on the quality of the power tools it is manufacturing, but on whether its owners know the right men in Washington.

As soon as he takes the oath of office, President-elect Joe Biden ought to scrap every last part of Trump's tariffs. Unfortunately, that doesn't seem likely. Maybe Republicans will finally start to care about undoing the bureaucracy of tariff exemptions once Democrats are running it.

NEXT: The Government Isn't About To Tell You To Stop Drinking Now

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  1. Thankfully, there won’t be any bloat or corruption when Biden signs the trans-Pacific partnership deal to outmaneuver China on regional trade!

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      1. Not as smart as Hillary: $2 billion in a “charity” so she doesn’t even have to pay taxes on it, just lives off the interest. And best part: she got most of it from foreign countries while secretary of state!!!

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  3. See, this is why Reason.com is my favorite website.

    “By noon today I expect a Boehm article denouncing Drumpf’s tariffs and a Dalmia column demanding open borders.”

    In these uncertain times, it’s comforting to know that Reason will reliably do what it does best — promote Charles Koch’s economic agenda.

    1. The easiest prophecies ever.

      Let me try:

      1. This evening Sullum will release a column denouncing and mocking Trump for refusing to accept the will of the media, vis a vis the election.

      2. Sometime this week Robby will write an excellent article about some fresh woke outrage against humanity, but will then include a “to be sure both sides”.

      3. Sometime this week ENB will call Ron Paul “Hitler”, declaim free markets and make excuses for Uighur organ factories. Gillespie and the Robby will rush to her side and tell detractors that she is the most libertarian person they know.

      4. Sometime this month Suderman will orgasm while making a strawberry-oil-infused Herbs + Rye’s Ramos Gin Fizz. Gillespie and his jacket will get in a fist fight.

      1. Gillespie and his jacket will get in a fist fight.

        I can already see the jacket asking Nick, “why do you keep hitting yourself?”

  4. It’s difficult to know if lobbying by Congress made a difference…

    As opposed to when it’s painfully obvious, like during administrations that don’t fall out of “normal parameters”.

  5. Now do a writeup on China’s slave labor and concentration camps. Or does that violate some unwritten rule.

    1. Some of rich Uncle Charles’ best friends run slave labor and concentration camps in China.

  6. An unconstitutional taxation scheme championed by conservatives!

    1. lol… Ironically the power for tariff’s is well established in the U.S. Constitution. Just about word for word.

      1. Just about…except that the power to tax rest solely in the hands of the legislature. Don’t tell me you think our revolutionary forefathers planned to give the power to tax to 1 man? Kinda of flies in the face of the rally cry, no taxation without representation.

        1. Excellent point – absolutely correct!

  7. After Trump did more than ANY president to drain the DC swamp, Trump hating Boehm and Reason falsely claim the opposite.

    The only reason Big Pharma ran anti Trump ads (falsely claiming he was promoting socialized medicine) during the summer and fall, and the only reason why large drug companies waited until the week after the election to reveal that their Trump funded covid vaccines were ready to market was because Trump sharply reduced federal government payments for all prescription drugs (to the lowest price the companies charge other countries).

    1. Trump also did more than ANY other president to eliminate, reduce and/or delay thousands of outrageously costly regulations (that were lobbied for by DC swamp creatures (i.e. monopolist corporations that want to destroy competition, and their overpaid left wing Democrat regulator allies who receive federal checks.

      1. Boehm and Reason are upset because Charles Koch didn’t receive any financial windfalls from Trump.

        1. How is the weather on planet Dumbass?

          1. Piss off Jeff and take all your shitty sockpuppets with you.

            1. I have so many sockpuppets, you will never discover them all! Never!

              In fact, you too are one of my sockpuppets! Mwahaha

    2. Trump filled his administration with corporate lobbyists and executives, so your comments are confusing. Please provide examples as to how Trump drained the swamp. Also please state where in this article the author made factual errors.

  8. You know what what Boehm has never mentioned that made everything a hell of a lot less swampy?

    The massive deregulation that took place over the last three years…

    Funny that.

    Or all the tarriffs that disappeared when the USMCA took over from NAFTA…

    Funny that.

    Or the fact that most of the remaining tarriffs target rich Uncle Charles friends in the CCP…

    Funny that.

    1. YES to all that. I am waiting for Sullum’s article on Trump winning America’s Most Admired Man in the Gallup poll. You would think the Big Guy who got 84 million votes or something (while only winning 477 counties to Trump’s 2497 counties) would have won, but no.
      https://www.politico.com/news/2020/12/29/trump-gallup-most-admired-452126
      Dear Libs, tell me again about how land doesn’t vote, people do?

    2. Let’s talk about that “massive deregulation”.

      https://regulatorystudies.columbian.gwu.edu/reg-stats

      Not all that “massive”.

      1. By your own cite it looks pretty massive drop to me. 2017 was the lowest since 1984. 2019 was influenced by the switch from NAFTA to the USMCA but it was still lower than any year in Obama’s term and less than half of his final year.

        https://regulatorystudies.columbian.gwu.edu/sites/g/files/zaxdzs3306/f/image/RegStats/July_9_2020_Update/GW%20Reg%20Studies%20-%20Economically%20Significant%20Final%20Rules%20by%20Presidential%20Year%20-%20Reg%20Stats_July%202020.pdf

        1. It’s amazing how far the resident progs will go to denigrate the libertarian things that Trump has done because orangemanbad:

          “Trump’s deregulation efforts weren’t massive enough. The Israeli/Arab and Serb/Kosovar peace accords were inconsequential because they weren’t currently fighting a hot war. DPRK rapproachment is meaningless because it’s not completed. The Taliban peace deal is meaningless because shut up. An executive order for school choice is smoke and mirrors because an accompanying federal program wasn’t created. The First Step act was something something. Trump pardoning drug offenders doesn’t matter because he pardoned his friends or they’re not enough.”

  9. Tariffs would hurt their profitability. Contracts were already locked in and couldn’t be altered at the drop of a hat. Alternative supply chains would take time and money to develop.

    Now; lets talk about how much taxes and inflation hurts *everyone’s* profitability. How business taxes literally PUT supply chains into China instead of the USA.

    And how putting any kind of tax on national trade to fund a national government body is “supposedly” the wrong place for the taxation (i.e. tariff).

    Let’s see here on the “fairness” table.
    Importers – 0% to 15% tax
    USA Markets – 50% to 90% tax
    Oh…. Those POOR Importers — Ya right; gimme a break.

    1. Tariffs are taxes on US businesses that import, but instead of going though the legislative process and allowing ample time to prepare for changes, tariffs are imposed quickly.

  10. You’re a complete fucking moron if you can’t tell that Trump made everything swampier. But hey, the rubes like a cheap slogan so they’ll all still chant it and imagine he did anything of the sort.

    1. I’m a complete fucking moron then. Because what I saw was a man who was attacked and ostracized before he was even inaugurated. No “insiders” would come to his events, and Soros et al paid protestors to smash up businesses on his inauguration day. His friends, and even his lawyer, were investigated and arrested and ruined. Carter Page and Michael Flynn were framed just for being associated with him. Clinton paid for a hoax dossier and Obama had him spied on in his home. He was an outsider, and he remains an outsider, and the swamp HATES him, even many swamp Republicans. His election, and now the stealing of his second election has revealed more about the media, the swamp, the Davos crowd, and the filthiness of politics as usual than anything in my lifetime. Watergate is a joke compared to what just went down.

      1. “I’m a complete fucking moron then.” That is the most truthful statement in that rant.

        1. To be called a complete fucking moron by someone who regularly defends Joe Biden is both an honor and a privilege.

      2. Time for MJane to put down the Mary Jane once in a while.

    2. Piss off Jeff and take all your shitty sockpuppets with you.

    3. swampier — I do not think that word means what you think it does. In terms of crony socialism; Trumps first 3-years were all about sucking out the swamp.

      But like mimicking lefty parrots of the same cage; You’ll stand around demonizing the socialist Cares Act and last Budget Bill and blame it all on President Trump and then completely back and ignorantly ignore that the Democrats just demanded more and the Cares Act was written and pushed by 87% Democrats.

      Party Partisan discrimination to the MAX! Then again; what else would one expect from the party of skin color slavery and identity politics? The left is all about the concept of “mobs”.

      1. Trumps first 3-years were all about sucking out the swamp.

        And we know this because Trump said so, and you can trust what he says because he’s a Real Murican representing Real Murica and if you disagree you’re a traitor.

        1. You joke but there are a huge chunk of Americans who actually do believe anything Trump says.

        2. Well I sure as hell can’t trust all the dishonest shit you and Chipper say, so I guess it’s Trump.

          1. Or it’s the tax-cut and multiple and noticeable de-regulations that occurred like EPA harassment, BLM (Land Management) harassment, a stronger USD, Short-term FDA approval times, School Choice, etc, etc, etc…..

            But no, no; the common lefty here will compulsively focus on the last year and entirely ignore the first 3.

  11. “The Swamp” is the unelected powers in D.C. Bureaucrats and the revolving door lobbyists, permanent congressional staffers, legislative councils, lawyers etc. You could throw the D.C media in there too so, junior as he is, Boehm is more “swamp” than Trump or Hawley. Elected politicians aren’t the “swamp”. They employ swampers, cater to swampers and often do exactly what swampers tell them to do but they only become part of the swamp when they leave office but don’t leave town.

    1. At this point, and sadly, the CIA and the FBI are complete swampers. So is the DOJ. And the IRS. Card carrying union members who get big fat pensions, work cars, better healthcare than you, and better paid than you while enjoying full job security and flexible work weeks that never amount to a full 40 hours. And your taxes make that happen! But to be a swamper: You HAVE TO BE A DEMOCRAT, or you’re not really part of the cool kids. See also: Big Tech, Big Law, the MSM, Hollywood, and the Ivory Towers.

  12. King Rat Trump!

    “There is no safety for honest men except by believing all possible evil of evil men.” ~ Edmund Burke

    “The primary reason for a tariff is that it enables the exploitation of the domestic consumer by a process indistinguishable from sheer robbery.” ~ Albert Jay Nock

    Trading D.C. swamp rats for N.Y.C. sewer rats got us, even, more septic rats.

    1. Come now. We all know that Albert Jay Nock was a progtard socialist.

  13. Poor Commies at unreason.

    At least they will have Trump during his second term as President 2021-2025 to scream over.

    1. It’s starting to look pretty good for January 6. At the very least, Americans will get to see and hear what the MSM is trying to hide from them.
      https://www.politico.com/news/2020/12/29/trump-gallup-most-admired-452126

      Biden “won” 477 counties to Trump’s 2497 and Obama’s 873. Trump won more counties than Obama and Biden combined, won 18/19 bellwethers, won House seats, and won more votes than he did in 2016, while increasing his minority support. ELECTION FRAUD SHOULD NOT BE TOLERATED.

      Hahahahahahahahaha! The most secure and honest election ever.

      1. Hey, they counted those counterfeit ballots twice!

      2. While winning the most counties is not the absolute indicator of winner in presidential races, there was massive democrat election fraud and u constitutional changes to election laws due to kungflu.

        As I said, Millions of mailin ballots are getting tossed. 215,000 in Wisconsin are the start.

        1. And how ’bout that Georgia hearing yesterday? When they hacked into a voting machine during the hearing. Krebs and his “safest, most secure election ever” testimony is full on ridiculous now. Even CBS is covering the Solar Winds hackfest and Dominion used Solar Winds and also: Soros owns Dominion.

  14. While driving earlier I stumbled across what must have been right-wing-radio, because the guy was going on and on and on about fraud and mail in ballots and record numbers going to Trump but he lost anyway… No wonder the Trumpistas are tearing their hair out. I would be too if I believed all that bullshit.

    1. Wait a minute…are you saying Qanon isn’t real? Please. Next thing I know you’ll claim there is no Deep State.

  15. Reason correctly points out that tariffs invite special favors, and the response? Commies! Deregulation! Fairness! Slavery! You hate Trump! As if that somehow negates the point of the article.

  16. The responses to this article is just one more reason why Trump has to go.

    What happened here is the apotheosis of crony socialism. The government imposes some rule, and well-connected individuals and businesses are granted special exemptions for themselves. This is no different than Solyndra execs making donations to Obama and then receiving sweetheart loans in return. But because it’s Trump, the “principled conservatives” are falling all over themselves trying to deflect and dodge with a cavalcade of whataboutism.

    Team Red has fallen into a cult of personality and that is just unhealthy. I don’t care what you think about the tariffs, the process for granting exceptions to the tariffs, etc., the fact that so many people really don’t care about any of that and are just mindlessly defending Trump is just wrong. He’s not worth it, no politician is worth that level of devotion, and people need to come to their senses and stop worshipping these people.

    1. The day I stopped listening to talk radio was the day after Trump got the nomination back in ’16. The hosts went from being open minded and giving criticism where it was due to fawning over him and defending every stupid thing he ever said or did. Thing is, people bought it. Trump became a Reagan incarnate, instant conservative sainthood, like Obama being given a Peace Prize for absolutely nothing. Same mentality. And it’s still going on.

      It’s not just unhealthy. It’s dangerous.

      1. It has the potential to become very dangerous, yes.
        I stopped listening to talk radio sometime around 2013-14 or so, when it was nonstop Obama bashing and anti-immigrant crap. I wasn’t a big fan of Obama either, but come on, talk about something else for a change. And the anti-immigrant crap was nauseating.

        I think the Era of Trump has revealed what so-called “Real Conservatives” actually value. They don’t want limited government or liberty for its own sake, they want a Strong Leader who will save America from all of the Bad People (terrorists, immigrants, socialists, SJWs, etc.). In hindsight, they didn’t like Reagan because of tax cuts, they liked Reagan because he said mean things about the Soviets, just like how Trump now says mean things about Mexicans or Democrats. That’s why they like him. Ideology is a distant second. He is a Dear Leader who makes them feel good about themselves. That is “real conservatism”.

        1. The left wants mommy government to take care of them and nurture them.

          The right wants daddy government to defend them and kick ass.

          Libertarians want government to leave them alone.

        2. It has the potential to become very dangerous, yes.
          Ideas are dangerous now. We need to get rid of this “free speech” idea.
          Let SleepyJoe tell us what is ok to think.

      2. Or Cuomo getting two awards for having the most COVID deaths in his state? You mean like that?

        I don’t like Trump at all. He’s obnoxious and gross and arrogant. BUT: what I really hate is fake journalists fawning over Democrats while attacking Republicans, and government cheating of any kind.

        Hillary Clinton setting up her fake charity and collecting $2 billion from foreign governments and getting a complete pass from the media was akin to Bush getting blamed for 9/11. Bullshit of the highest order, and accepted by the MSM.

        This summer of well-organized riots and looting paid for by oligarchs and called “largely peaceful” by the media helped to destroy thousands of small businesses already hurt by COVID.

        And the MSM spent the year blaming the President for COVID when the blame falls on China and to every Dr. Fauci error that did nothing but hurt people while getting him more fame and awards.

        Talk radio may be stupid. But so is believing that Dementia Joe racked up 84 million votes without cheating. That’s the stupidest thing I have ever heard.

        1. I don’t like Trump at all.

          Bullshit. You suck his dick every day on these forums.

          Hillary Clinton setting up her fake charity

          Have you heard about the Trump Foundation?

          https://www.forbes.com/sites/danalexander/2017/06/06/how-donald-trump-shifted-kids-cancer-charity-money-into-his-business/?sh=7cf28ddb6b4a

          1. What about……..

          2. dumbjeff radical individualist, I’ve found people who say “suck his dick” tend be really stupid, like your hilariously stupid moniker.

            But not as stupid as people who liken the lawsuit against the Trump Foundation by the NY Attorney General (total partisan) to Hillary’s grifting $2 billion into her fake charity while secretary of state unchallenged.

            “The president’s foundation agreed to shut down late last year to settle a case brought by the New York attorney general, which accused the nonprofit organization of funding Trump’s business and political interests.” https://www.rawstory.com/2019/12/trump-foundation-shut-down-but-not-over-claims-of-theft-against-kids-cancer-charity/

            In one, Trump paid out $2 million to settle a lawsuit. In the other, Clinton pocketed $2 billion in payola. Can you tell the difference, DumbJeff?

            1. Orders of magnitude? Wazzat?

    2. Listen, Reason’s comment section is no basis for a system of government. Supreme executive power derives from a mandate from the masses not from some farcical autistic ceremony.

    3. I think people have learned that no elected official is perfect. Despite certain “wrong” things Trump has done (bump stocks would be another example), he has been a net gain for liberty. Deregulation, taxes, imbecilic treaties, lowest unemployment rate achieved, wonderful defense policy, etc. There were a lot of excellent things Trump has done, leaving a net gain for liberty overall.

  17. You can’t increase swampiness above 100%

    1. But if you’re a Democrat in a swing state you can win over 100% of the vote.

  18. I pick this winner and that winner and that winner and that winner. Not you, you’re a biggly loser! Oh yeah, let’s not forget that winner.

  19. Poor unreason commies.

    1. Commies masquerading as libertarians…I’d say it takes a lot of talent to pull that off but Reason isn’t that good at hiding it.

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