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Elizabeth Warren Challenges Trump's Protectionist Tariffs for Not Being Protectionist Enough

Warren is criticizing a fundamentally unfair process, but only because she wants the outcomes to be slightly different.

Michael A. McCoy/ZUMA Press/NewscomMichael A. McCoy/ZUMA Press/NewscomArtificially hiking the price of steel and aluminum is bad enough, but one of the really galling parts of the Trump administration's tariff policy is the Commerce Department's process for determining which businesses are exempt from paying these import taxes. As I've written before, the so-called "tariff exclusion process" is opaque, confusing, completely lacking in due process, and infested with cronyism.

It's good to see some members of Congress calling out the administration for this mess. That's what Sen. Elizabeth Warren (D–Mass.) does in a letter sent Wednesday to Commerce Secretary Wilbur Ross, the guy who is supposed to be overseeing the tariff exemptions.

Unfortunately, a significant part of Warren's letter makes the argument that what's needed is more protectionism, not less.

"You appear to be implementing the tariff exemption program in a way that undermines American steel producers—by allowing large tariff-free imports of foreign steel—and harms American-owned steel-dependent companies instead of improving their competitive advantage over companies headquartered in China and other foreign countries," Warren writes. Specifically, she says granting tariff exemptions to Chinese- and Japanese-owned companies with U.S. subsidiaries constitutes "a major loophole."

When the steel and aluminum tariffs were implemented in March, Ross promised that the department would operate a "fair and transparent process" to determine which businesses should be exempt from the tariffs. According to the government's websites outlining the tariff exclusion process for steel and aluminum, the exemptions would be granted for businesses that could demonstrate that there was not adequate domestic supply of the type of steel or aluminum they needed. There is virtually no information about who is deciding which exemptions get granted, or why, or how. It leaves the impression that the department is trying to make a high-stakes game that's full of political influence look like a rote bureaucratic operation.

Problems with the process emerged almost immediately. Businesses have complained to congressional committees about a lack of transparency from the Commerce Department, about the inability to appeal the Commerce Department's decisions, and about the influence exerted by American steelmakers on the outcome of exemption applications.

"No forum is provided for interaction with those determining the merits of either the petitioners' or the objectors' arguments," Willie Chiang—vice president of Plains All American GP, a Texas-based pipeline company that's been on the losing end of the exemption process—told the House Ways and Means Committee in July. "In addition, there is no opportunity to respond to objections—even if the objections contain incorrect information."

Some Republican lawmakers, including House Ways and Means Committee chairman Kevin Brady (R-Texas), and Sen. Ron Johnson (R-Wis.) have criticized the exemption process and called for changes, seemingly to no avail.

As of mid-October, the Commerce Department had received more than 30,000 steel tariff exclusion requests, and approved about 11,000 of them. Warren's staff analyzed the first 909 decisions posted, and found that 81 percent of the exemptions granted were awarded to companies headquartered outside the United States. More than half of those exemptions were awarded to Japanese-based businesses and more than 80 percent to Chinese- and Japanese-owned businesses, she says in the letter to Ross.

"How is this outcome," she asked, "consistent with President Trump's claims that the tariffs and the tariff exemption process were designed to help American steel producers and users?"

Let's be clear: The exemption process is a horror show. It's fundamentally unfair to have government officials in Washington, D.C., deciding that one company has to pay an additional 25 percent for imported steel while some of its competitors are able to avoid those added taxes. The fact that those decisions are made without any recourse or due process is more infuriating still.

But the problem isn't that the majority of the exemptions are going to foreign-based firms. At most, that's a symptom of the issues created by the tariffs and the tariff exemption process. If the majority of the exemptions were granted to American firm, the process would be just as broken.

Warren's letter leaves the impression that she thinks the Commerce Department is being too lenient about granting exemptions. But short of repealing the tariffs entirely, the best possible outcome would be for Congress to instruct the department to approve all exemption applications, regardless of whether they come from American-owned or foreign companies. Her complaint that the Trump administration is not doing enough to favor American firms over foreign competitors is not a criticism of the tariffs themselves; it's an indication that Warren would have no qualms with the president wielding those same powers as long as they were applied in a slightly different way.

Politically, this is an attempt to beat the Trump administration at its own game. That might be politically useful for Democrats who want to wrestle blue-collar voters away from Trump. Indeed, one way to look at Warren's letter is as a trial balloon for how to attack Trump's tariffs in 2020. But it ends up being an argument for more protectionism, and it essentially turns the tariff debate into a question of which side can promise to erect more barriers to foreign imports. That's a debate in which America loses, no matter which party wins.

Photo Credit: Michael A. McCoy/ZUMA Press/Newscom

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  • Mr. JD||

    Poor Reason. It has been trying so hard to make Trump worse than the Democrats, but the Democrats will never let that happen.

    Did anyone really think that it was possible for Republicans to be as bad as Democrats on tariffs?

  • Chipper Morning Baculum||

    This is like celebrating a less virulent strain of syphilis.

  • Tony||

    When was the last time Democrats enacted tariffs?

  • MarkLastname||

    Obama's Steele, tire, and solar panel tariffs. So, last time they were in office.

  • Don't look at me!||

    Why are we paying attention to this woman all of a sudden ?

  • Echo Chamber||

    Thanksgiving is approaching. She's published recipes

  • Enjoy Every Sandwich||

    I'm dying to try her recipe for Cherokee Pineapple Pizza!

  • Remember to keep it all polit||

    Because she's out-Trumping Trump. Any Trumpista who supports his tariffs should embrace Lizzie, if they have any principles. But if they had any principles, they wouldn't embrace collectivist coercion in the first place.

  • Fats of Fury||

    She'll teach us to grow corn.

  • Fist of Etiquette||

    Unfortunately, a significant part of Warren's letter makes the argument that what's needed is more protectionism, not less.

    Well, she, like the president, is a Democrat after all.

  • Jerryskids||

    As I've written before, the so-called "tariff exclusion process" is opaque, confusing, completely lacking in due process, and infested with cronyism.

    So unlike the rest of government programs, which are transparent, simple, fair to a fault and completely neutral in their principled application. And I am shocked to think you're hinting that a humble public servant might be an unprincipled shitweasel only interested in doing whatever helps them get re-elected rather than what's in the best interests of the citizenry. Are there any other politicians I should be warned about who are more interested in wielding power than defending liberty?

  • Chipper Morning Baculum||

    Is there such a thing as a principled shitweasel?

  • chemjeff radical individualist||

    The weasel is very honest about how shitty he is.

  • Jerryskids||

    If you can correctly predict with a high degree of certainty exactly how the shitweasel in question is going to react in any given situation, it's a principled shitweasel. Shitty principles, but principles nonetheless.

    For example, given the headline "Trump Does Some Terrible Shit" try to predict who the first commenter is going to be and what his comment is going to say and how many other commenters who call him out on his knee-jerk defense of all things Trump he's going to insult in a typo-riddled rant about how he's not a Trumptard and everybody else just suffers from TDS.

  • prolefeed||

    Warren is criticizing a fundamentally unfair process

    Tariffs are taxes. Unless you agree that taxes are theft, then where is the unfairness? That some people owning companies are taxed differently than others?

    And why are you making an argument from "unfairness" anyway? One way to make things "fair" is to whop everyone with the same high taxes, even though that is, from my perspective, making things even more unfair in that more theft is occurring.

    Leftists value fairness, as they choose to define it, even though life isn't fair. Quit arguing lefty talking points and conceding the game upfront.

  • prolefeed||

    Oh, and any progressive arguing about unfairness while simultaneously arguing for the incredibly unfair progressive income tax rates is at best being oblivious and at worst lying about what they really want.

  • chemjeff radical individualist||

    Leftists value fairness, as they choose to define it, even though life isn't fair.

    EVERYONE values fairness, to lesser or greater degrees. It's not a leftist thing.

    The difference is, the degree to which the principle of "fairness" should be used as a rationale for state action.

  • A Thinking Mind||

    The thing that's unfair about current tariffs is that they're not being voted on by Congress, but dictated by the office of the president. Congress is supposed to hold the power of the purse, but there's a nakedly obvious end-run by using the "national defense" scam.

    Even if I were completely okay with Trump's Trade-War, I'd still hate the fact that he can conduct it entirely on his own without needing to go through Congress. In the same way that I might be fine with certain military actions being taken, I'm unhappy with the fact that Congress keeps expanding the freedom of the presidency go to war whenever it wants.

  • chemjeff radical individualist||

    Well, same as it ever was I suppose. I guess both Team Red and Team Blue are going to succumb to protectionist nonsense.

  • Tony||

    I hope she is every evil thing you idiots think she is once she's president.

  • MarkLastname||

    That's nice.

  • What's that smell?||

    She'll never be president. That change blew-up in her face when she detonated her DNA results. No she'll just remain in the senate spouting stupidity for 40+years like fat-assed Teddy.

  • Diane Reynolds (Paul.)||

    Elizabeth Warren Challenges Trump's Protectionist Tariffs for Not Being Protectionist Enough

    El oh fucking el.

  • Enjoy Every Sandwich||

    It's not surprising to me that a devotee of centrally planned economies like Warren would love tariffs.

  • Agammamon||

    . . . by allowing large tariff-free imports of foreign steel—and harms American-owned steel-dependent companies . . .

    Lizzie . . . Elizabeth, dear. How does importing cheap steel hurt *steel dependent* companies? How does it hurt them to have their critical supply cheap? Are . . . are you taking - is that another DNA test you're filming?

  • AD-RtR/OS!||

    Liz, your argument is with the Tribal Elders in Massachusetts Bay.

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