Trump turmoil keeps K Street busy on trade

Trump turmoil keeps K Street busy on trade
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President TrumpDonald John Trump Former US ambassador: 'Denmark is not a big fan of Donald Trump and his politics' Senate Democrats push for arms control language in defense policy bill Detroit county sheriff endorses Booker for president MORE’s latest actions on trade have roiled Washington and global markets but are proving to be a boon for K Street.

Lobbyists who specialize in trade have been busy since Trump came into office, and the intensifying turmoil has more businesses turning to the influence world to help navigate the changes.

Trump’s decisions last week to start the clock for Congress to approve his new North American trade deal and to hit Mexico with tariffs over concerns about illegal immigration has trade experts flush with work.

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“Clients who we have never had engage us on trade are engaging us on trade work,” Amy Smith, a policy adviser at Arnold & Porter, told The Hill. “It’s very unpredictable and we are always expecting something from the administration at this point.” 

Nearly 2,400 lobbyists are registered to work on trade issues so far in 2019, according to the Center for Responsive Politics, up from 2,370 in 2016. And those lobbyists have more clients. In the first quarter of 2019 alone, 723 clients lobbied on tariffs and trade issues, with 1,019 trade clients for the year so far. That compares to 1,300 total in all of 2018 and 926 in 2016.

The lobbyists working on these issues say they are busier than ever though.

“In all my years practicing trade, I’ve never seen it this hot of an issue,” said Frank Samolis, co-chair of international trade practice group at Squire Patton Boggs.

K Street began the year already busy dealing with a host of trade issues after the U.S. swapped retaliatory tariffs with the European Union and China. Companies seeking answers, and in many cases exemptions, for their products have turned to lobbyists for help.

Now that work is going into overdrive. 

Trump announced Thursday that the U.S. will impose a 5 percent tariff beginning June 10 on all imports from Mexico in an effort to pressure that country to halt the flow of migrants from Central America. And on Friday he said that India would be removed from the Generalized System of Preferences, a trade program that exempted goods from the country from import duties over $6 billion.

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And there are new worries about the revised North American Free Trade Agreement (NAFTA), known as the United States-Mexico-Canada Agreement (USMCA) after the administration submitted a statement of administrative action on Thursday starting the clock for lawmakers to approve it.

The move sparked anger from congressional Democratic leaders, who said they had been working on a deal for approval with the White House, and from Republicans, who worried the new tariffs on Mexico could endanger passage.

Lobbyists said the move caught clients off guard and highlighted the confusion over trade policy.

“They’re really looking for certainty,” David Castagnetti, a partner at Mehlman Castagnetti Rosen & Thomas, told The Hill.

Business groups have already been making a push for approval of the new NAFTA, including the Chamber of Commerce and National Association of Manufacturers, as well as new bipartisan groups such as the Pass USMCA Coalition. 

“I think there is wide interest in seeing progress on USMCA, in part because NAFTA has been an agreement that’s been in effect for so long and never really taken steps to modernize,” David Stewart, a principal at Squire Patton Boggs, told The Hill.

Efforts to push through the USMCA are also intensifying. More companies are joining coalitions backing the deal or hiring lobbyists to push for passage.

“For many companies, investment and hiring decisions are being put on hold indefinitely until they can go back to business as usual,” Stacy Ettinger, a partner at K&L Gates, told The Hill. “Getting congressional approval on the new NAFTA could help alleviate some uncertainties, although concluding the process seems less likely with the recent threat to impose tariffs on all imports from Mexico.”

Trump has exacerbated other trade tensions as well, hitting China on new tariffs in recent weeks as talks between the two countries stalled.

Lobbyists told The Hill those moves led to new clients for K Street as more companies find themselves affected by Trump’s trade actions.

Asked if more industries are being affected by trade issues, Samolis said, “Yes.”

“I’m surprised that the number of chemical and chemical-related companies we have as clients who are suddenly finding their products being interrupted with additional tariffs,” he said. “We have clients that are in ... specialty textile products.”

Those who spoke to The Hill said that while many of these businesses were no strangers to trade issues, they were increasingly worried about lasting damage from the tariff fight.

“I do not see either the U.S. tariffs or the retaliatory tariffs imposed on U.S. exports by our trading partners ending any time soon,” Ettinger said.

The China tariffs in particular have hit both manufacturers and farmers, with China last week deciding it would halt all purchases of U.S. soybeans in retaliation. That has agriculture companies also coming to K Street for help, lobbyists told The Hill.

The Trump administration is taking steps to ease the blowback on farmers. The Agriculture Department announced last week it will provide billions more in trade aid.

“The business community as a whole, I think, is concerned about what our relationship with the Chinese is like and what it’s going to be moving forward,” Castagnetti told The Hill.

“At this point, the biggest one is the concern about will there be some kind of new China trade deal and ultimately what does that deal look like,” he added.

Going forward, lobbyists expect the trade chaos to keep K Street busy.

“Our clients can deal with bad news for the most part, but what they can’t deal with is uncertainty, if they don’t know now how long this trade war is going to last, what Trump is going to do, and therefore they can’t plan ahead very well,” Samolis said.

Stewart said clients are all asking, “What are the next shoes to drop?”

--This report was updated at 11:08 a.m.