Lobbyists Are Making Bank on Trump’s Steel Tariffs

By | February 14, 2019

President Donald Trump took office two years ago with promises to “drain the swamp”—but swamp-dwelling lobbying firms have been one of the main beneficiaries of his trade policies so far.

Steel manufacturers spent $12.2 million lobbying the federal government in 2018, an increase of nearly 20 percent over the previous year, according to new data from Center for Responsive Politics, which tracks political spending. The increase was likely a response to Trump’s decision to place a 25 percent tariff on imported steel and to grant broad powers to the Commerce Department to decide which American steel-consuming industries would be exempt from those new taxes. Steel producers spent more on lobbying in 2018 than in any other single year since at least 1998, when the Center began tracking annual lobbying spending.

Leading the way was Nucor, a North Carolina-based steelmaker, which spent more than $2.2 million lobbying last year. Separately, Nucor CEO John Ferriola gave $25,000 to Trump Victory, a joint fundraising committee for the president and the Republican National Committee, just weeks after Trump imposed the steel tariffs, The Wall Street Journal reported. The Journal also says Nucor sought to influence the appointment of two high ranking trade officials who serve within the Commerce Department and the Office of the U.S. Trade Representative—the two parts of the federal government with control over the implementation of the steel tariffs.

That the steel industry has tried to influence government policy is hardly a surprise. Neither is the fact that groups like the U.S. Chamber of Commerce and various industry groups representing steel-consuming businesses have also ramped up lobbying in opposition to Trump’s tariffs. But the increase in lobbying spending highlights one of the unfortunate realities of Trump’s bellicose trade policies: the more control government has over which businesses succeed and fail, the greater the demand for access to the halls of power.

One of the ways that the lobbying power of Nucor and other major U.S. steelmakers has manifested itself is in the all-important exclusion process that determines which imports are subject to tariffs and which are exempt. The shadowy process has no due process protections, little transparency, and appears to be ripe for corruption. An investigation by one congressional office last year found that the Commerce Department had not granted a single exemption when objections to the application had been raised by Nucor or U.S. Steel. The process does not allow denied applications to be appealed. In short, it is the perfect forum for a powerful special interest to do maximum damage.

“A petitioner’s ability to state its case is limited to the submission of a standardized form and supporting electronic documentation,” Willie Chiang, the CEO of a Texas-based pipeline company, told the House Ways and Means Committee during a hearing last year. “No forum is provided for interaction with those determining the merits of either the petitioners’ or the objectors’ arguments. In addition, there is no opportunity to respond to objections—even if the objections contain incorrect information.”

A group of senators leading an effort to limit Trump’s tariff authority have called for a Government Accountability Office investigation into the Commerce Department’s exclusion process.

Rather than reducing the influence of the K Street swamp, Trump’s dogged pursuit of tariffs has created enormous opportunities for lobbyists to shape government policy, and, more infuriatingly, to determine which of their competitors succeed and fail.

Category: Liberty
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