Trump's new scheme is 'the Beltway Swamp's dream'

First came the across-the-board tariffs, then the increases for specific targets, including China. Then we started hearing about White House-ordered exemptions, including for semiconductors for the tech industry, though there were hints they might be revisited over time. It took no time for people to notice that the same Big Tech folks who were paying into Donald Trump’s inauguration and standing with him were benefiting.

It turns out that a thousand products have been exempted from the extra taxes. The exemptions cross different industries, affect different countries, and defy easy categorization.

What they share is that they well may be represented by loyal political friends of Donald Trump and that they were decided singularly by him — in secret, according to reporting by ProPublica. Many businesses are reaching out to a particular lobbying group that has White House ties even to get in the door to make a pitch for exemptions.

ProPublica, an independent journalist group, says that the lack of transparency about the process has created concerns among trade experts that politically connected firms might be winning carve-outs behind closed doors.

Apart from the wide concerns about the chaotic effect that tariffs have had over global financial markets, trade arrangements and business planning about jobs, prices and sales, routing all tariff traffic directing through a single many in the White House sets up a situation rife with opportunity for undue influence and abuse.

What’s Exempted?

ProPublica offered some examples from a list of exemptions from the White House that illustrate the concern because there are no official explanations.

One exemption is for PET resin, polyethylene terephthalate, used in making plastic bottles. An immediate beneficiary is Reyes Holdings, a Coca-Cola bottler, owned by brothers Chris and Jude Reyes, who have donated millions of dollars to Republicans, and who, records show, recently hired a lobbying firm with close ties to the Trump White House to make its case.

In the executive order formalizing Trump’s new tariffs exemptions were broadly defined as products in the pharmaceutical, semiconductor, lumber, copper, critical minerals and energy sectors. PET resin does not seem to fit and other petroleum-dependent products were not included. The resin could prove important to bottling companies seeking an alternative to aluminum, which does face tariffs.

Last year, records showed that Reyes Holdings hired Ballard Partners as a lobbyist on tariffs. ProPublica said Ballard, which once lobbied for The Trump Organization, has become a destination for companies seeking exemptions; its founder, Brian Ballard, is a noted fund-raiser for Trump.

The exclusions also include most types of asbestos, hardly a critical mineral, but it had been a target of Biden administration policies and perhaps won exemption just to thumb a nose at Biden. Other exemptions with no explanation include coral, shells and cuttlebone, used as a dietary supplement for pets, and sucralose, the artificial sweetener perhaps used in diet sodas that Trump favors. There also are exemptions for pesticide and fertilizer ingredients, including potash, an exemption sought by Sen. Charles Grassley, R-Iowa.

Is This Corruption?

Politico notes that with no formal process in place to submit exemption requests — as there was in Trump 1.0 — or to explain why they were granted or not after the fact, the issues involving exemptions are problematic.

Trade experts say openly that politically connected firms might be winning carve-outs behind closed doors, but that no one knows. It could be corruption, incompetence, random Trump generosity or reflective of some reasonable business logic.

The Wall Street Journal’s editorial board called “the opacity of the process” for getting an exemption “the Beltway Swamp’s dream.”

Trump has set himself up as the sole arbiter of tariff policy, muscling the power away from Congress, which has the legal responsibility to set such import taxes. He is resistant to the many lawsuits being filed about tariffs, including one this week from 12 state attorneys general from Democratic states, which argue that he lacks the Constitutional authority to wrest sole control of tariff-setting.

This same Trump, of course, insists on total control of much of his powers inside and outside of government, an attitude that draws consistent criticism from ethicists, inspectors general (until most were fired), oversight committees in Congress and the public. Just this week, Trump was offering what amounted to private meetings with buyers of his $TRUMP meme coins for the 220 highest bidders in what can only generously can be called an ethical problem. It comes awfully close to selling access to the president and his family.

It would not be difficult to conclude that secret avenues for loyalist business owners to seek special dispensation under a constantly changing tariffs program that no one seems to fully understand might just be creating opportunity for corruption.

But that concern has yet to fully blossom since there is no access to why the exemptions are being granted at all.

NOW READ: Only one thing is going to stand in Trump's way — and he knows it