Although President Donald Trump popularized calls to “drain the swamp,” his favorite policy tool, tariffs, has actually enlarged it and generated a massive financial windfall for K Street lobbyists while hardworking American families pick up the tab.
It’s no secret that almost every industry in America hires lobbyists to represent their interests in Washington, D.C. With a government as intrusively meddlesome as ours, policies and rules out of Washington, rather than the people through a free market, often determine winners and losers across the country. Unless that changes, the lobbyist cottage industry will always exist. The adage, “If you aren’t at the table, you’re on the menu,” rings most true in Washington, where decisions are made daily that affect industries and Americans nationwide.
Nowhere is this so clear as in the tariff exclusion process, which allows certain products of well-heeled industries (big businesses) to escape tariffs while others (small businesses) are bludgeoned. The tariff exclusion process is highly discretionary and ultimately depends on one agency’s judgment call.
So-called “government discretion” hardly guarantees a fair process, but this opaque complexity is a boon for Washington’s many lobbying shops. Remember, trade lobbyists swelled by more than 50% during Trump’s first term. With even larger and more arbitrary tariffs in play for Trump’s second term, K Street will likely load up on even more lobbyists to secure its own tariff exemptions from the administration while hoping its competitors are caught in the net.
Back-of-the-napkin math shows a blanket 10% tariff on all imports would increase annual costs by more than $400 billion. Ask yourself, what’s cheaper? Is it moving manufacturing to America or paying the Washington swamp tax to work the tariff referees and get your company an exemption? Even if a company could profitably relocate here, most would understandably rather try paying a lobbyist than upending years of planning and supply-chain development.
Put another way, you hardly have to move the ball down the field if the referees keep calling 15-yard penalties on your opponents. A 10% or 20% tariff on your biggest competitor would allow you to raise prices while still being the cheaper option at checkout. Special treatment enriches a select few at the expense of other businesses and American families.
During his first term, Trump’s Office of the United States Trade Representative received more than 50,000 requests for tariff exemptions related to China, and the Commerce Department was on the receiving end of almost half a million exclusion requests related to steel and aluminum tariffs.
While these first-term tariffs were somewhat narrowly enacted under the guise of national security, Trump’s newest plan to institute blanket tariffs against friends and foes will cause these exemption requests to increase exponentially.
Meanwhile, studies show the actual cost of tariffs will fall on Americans. So, while Washington lobbyists are enjoying their steak and lobster next Christmas, American families will be checking and double-checking their math to ensure they can put presents under the tree as Trump’s tariff proposals will cost the average family $2,600.
TEAMSTERS ASK TRUMP TO PUT TARIFFS ON MEXICAN BEER
Trump’s previous administration readily provided tariff relief to politically friendly companies while withholding it more often from others. This additional layer of favoritism further diminishes productivity, impedes job growth, and drives up prices. Expect these impacts to be more pervasive this go-around.
“Draining the swamp” starts by taking power out of Washington and empowering individuals. In a free society, businesses efficiently use their resources to respond to the demands of the people communicated in the marketplace. Unfortunately, Trump’s blanket tariffs will have the exact opposite effect as businesses instead maximize their profits by currying favor with the government. This fills the coffers of well-heeled lobbyists while raising prices on hardworking American families currently reeling from the 25% inflation of the past five years.
Joel Griffith is a senior fellow at Advancing American Freedom, founded by former Vice President Mike Pence.