Industries unite in battle against Trump’s tariffs

Powerful business groups are mobilizing their forces, urging President TrumpDonald John TrumpBooker hits Biden's defense of remarks about segregationist senators: 'He's better than this' Booker hits Biden's defense of remarks about segregationist senators: 'He's better than this' Trump says Democrats are handing out subpoenas 'like they're cookies' MORE to stop a wave of sweeping tariffs they worry will hurt the U.S. economy and start a global trade war. 

Trump’s decision to levy far-reaching tariffs has prompted business groups to form alliances in the hopes of persuading the president and lawmakers on Capitol Hill to curtail or kill the proposed trade moves. 

Business leaders have expressed growing concerns not only about Trump’s decision to slap tariffs of 25 percent on steel imports and 10 percent on aluminum imports, but the likelihood that the president will announce this week upward of $60 billion in tariffs on imports from China to punish Beijing for lax intellectual property protection practices.

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“We’re seeing a ready, fire, aim process, and we’re hoping that the next round of trade remedies that are considered are done more surgically and carefully,” said David French, senior vice president for government relations with the National Retail Federation (NRF).

The pressure on the White House is coming from across the business world, with advocates for the agriculture, retail and auto industry all releasing separate letters denouncing the steel and aluminum tariffs and warning against other potential trade moves.

Last week, a handful of business groups met up at the NRF to discuss how they can work with the White House and Congress to shape the tariffs and avoid being hurt by Trump’s actions. 

French said more than 600 groups are pooling their resources to, at the very least, persuade the administration to streamline the tariffs. He called it the largest such lobbying effort for the NRF since 2016’s successful campaign against the creation of a border adjustment tax.

“So this may have to be getting the band back together,” French said. 

Hun Quach, vice president for international trade at the Retail Industry Leaders Association, who attended the NRF meeting, said their main argument to the Trump administration is that higher tariffs will create additional costs “that will eventually get passed down to our customers” on products from clothing to electronics.

“The section 301 actions that the president could take will hit every sector of this economy,” she said. 

One lobbyist told The Hill that Trump’s actions make it difficult to know what the outer limit is on trade policy, especially given that his protectionist tendencies have been on display for decades.

On Friday, Trump is expected to follow through with his promise to impose hefty tariffs under the 301 provision — reportedly about $60 billion a year — to punish China for unfair intellectual property policies and practices.

Under section 301 of the trade law, the president has the power to take unilateral action to retaliate against China on trade. 

Even with business optimism at its highest levels in recent history, Trump’s tariff tirade is creating anxiety among some CEOs.

To that end, the business groups say they are working with the White House and advocating a strategic and a targeted approach to zero in on China’s persistent trade problems.

Joshua Bolten, president and CEO of the Business Roundtable, told reporters last week that the growing uncertainty surrounding trade, from the ongoing North American Free Trade Agreement negotiations and the investigation into China’s trade policies, are a “possible headwind” that could negate many of the benefits of tax and regulatory reform.

U.S. Chamber President and CEO Thomas Donohue said last week that if the China tariffs reach $60 billion, “the impact would be even more devastating.”

Yet some Republican lobbyists with corporate clients, including two close to the Trump administration, insist that the tariff threats are a means to bring other countries to the the negotiating table. 

“The end goal, in Trump’s mind, is to help business. It’s the stick he needs to get the carrot,” one said. “The carrot is to renegotiate NAFTA and get a TPP deal,” referring to an Obama-era trade pact with Pacific Rim countries. 

Although Trump withdrew from the Trans-Pacific Partnership (TPP) during his first month in office, he hinted more recently that he would be open to rejoining the agreement, provided changes are made.

A fourth lobbyist told The Hill that corporate lobbyists and chief executives are doing a disservice to the advocacy effort by focusing primarily on discussing the tariff issue with each other and with the administration, rather than trying to convince Trump's base in small towns that support the nationalist policies.

“They're talking to themselves and not communicating to the people [Trump is] trying to reach, at least to try and neutralize that issue. If you want to yell and scream at BLT [steakhouse], fine. But don't think that's going to have any impact,” the lobbyist said.

However, while the effort appears to be taking shape as a grasstops campaign — focusing on high-level influential figures rather than constituencies — many groups are targeting their messaging around the impact the tariffs could have on consumers.

The business groups argue that a blanket tariff approach won’t punish China and will instead only serve to hurt U.S. businesses.

Matt Priest, president and CEO of the Footwear Distributors & Retailers of America (FDRA), called the potential China tariffs “an existential threat to the American consumer.”

“There is no industry left behind in the sense of those that are under threat from this action because we all source goods from China,” Priest said.

In 2017, $3 billion tariffs were paid for imports into the United States by the footwear industry.

“For us, it’s how much is enough,” Priest said.

“Why on earth would you feel the need to continue to add insult to injury and pile on.”

Tariffs on most consumer goods average just 1.3 percent, but they average from 11 percent for footwear and reach rates as high as 67.5 percent.

But the administration has shown that it can shift on a dime, complicating the lives of staffers and advocates alike.

“I told a client this today: There are things that I would have ordinarily said have no chance of happening. It's a fool’s errand to make any large prognostications. The stuff that comes out over there [at the White House] is totally unpredictable and increasingly volatile,” a fifth lobbyist said.

“People think [U.S. Trade Representative Robert] Lighthizer is an adult who can do what he can on this. Ultimately, Trump, if he wants to be a force of nature and roll with his gut, who the heck knows.”

— Megan R. Wilson contributed.