Trump’s Tariffs Will Refill the Swamp
WSJ
By Merrill Matthews
Dec. 26, 2024 1:41 pm ET
During his first term, Donald Trump promised to “drain the swamp.” That didn’t happen. Now he may actually do the opposite. If Mr. Trump succeeds in imposing across-the-board tariffs, the swamp will grow.
Mr. Trump borrowed the drain-the-swamp mantra from Ronald Reagan, who invoked it in the 1980s to describe his efforts to shrink government bureaucracy. But Mr. Trump gave the mission new urgency and broader application, pledging to counter bureaucrats and Washington elites—corrupt lobbyists and other big-moneyed interests that make government work for the privileged to the detriment of average Americans. That message still resonates with millions of voters.
The problem is that Mr. Trump’s tariff program would energize and empower these elites. By directing government to impose levies on allies and adversaries alike, he’d be giving more strength to the swamp monsters he’s supposed to be defeating.
When Washington wants to impose new taxes, including tariffs, the companies and people who would be affected rush to trade associations, public-relations firms and lobbyists for help. These outfits then encourage their clients to make sizable donations to elected officials and their political-action committees. That doesn’t ensure the elected officials will take the company’s side, but it can often open their doors for access.
Lobbyists then set up meetings and expensive meals with congressmen, their staffs, high-ranking bureaucrats or those who know them—especially former congressmen or Hill staffers now working for other lobbying firms. The supplicants plead their cases at these swanky dinners, explaining why they should be exempted from new tariffs or why their competitors shouldn’t be.
The higher the stakes, the more time and money the companies are willing to spend. With Mr. Trump’s proposed tariffs—10% to 20% on all imports, 25% on Canada and Mexico, and up to 60% on China—the stakes have never been higher.
Regardless of whether companies get what they want from their meetings, they usually conclude that they need to keep the messaging and money flowing for a while. We have only a vague idea how much money is actually changing hands, who is spending it, where it’s going, and whom it’s helping. We do know, however, that it’s hurting the American consumer.
Don’t blame the businesses. They’re understandably trying to avoid paying higher taxes, most of which would be passed on as higher prices to their customers.
We saw this play out in response to Mr. Trump’s tariffs during his first term. When he imposed strict steel and aluminum tariffs in 2018, thousands of U.S. companies lobbied the Commerce Department to end the tariffs or exempt their operations. Some companies exempted from the tariffs lobbied the Commerce Department to keep them in place on their competitors.
As his tariff regime expanded, the number of companies deploying lobbyists in Washington tripled. According to the Journal, there were roughly 100 groups lobbying on tariff issues when Mr. Trump took office. By June 2018, there were nearly 450. Imagine how many more there will be if his second-term tariff program is as expansive as he’s promising.
There is still a chance Mr. Trump is using these threats as bargaining tools to get Mexico, Canada, China and other countries to make concessions. But no one knows for sure. It may also be that he will use tariffs to extract concessions from some countries and impose them arbitrarily on others.
What we do know is that if Mr. Trump moves forward with his blanket tariff proposals, the Washington swamp will be bigger and slimier than ever.
Mr. Matthews is co-author of “On the Edge: America Faces the Entitlements Cliff.”
By Merrill Matthews
Dec. 26, 2024 1:41 pm ET
During his first term, Donald Trump promised to “drain the swamp.” That didn’t happen. Now he may actually do the opposite. If Mr. Trump succeeds in imposing across-the-board tariffs, the swamp will grow.
Mr. Trump borrowed the drain-the-swamp mantra from Ronald Reagan, who invoked it in the 1980s to describe his efforts to shrink government bureaucracy. But Mr. Trump gave the mission new urgency and broader application, pledging to counter bureaucrats and Washington elites—corrupt lobbyists and other big-moneyed interests that make government work for the privileged to the detriment of average Americans. That message still resonates with millions of voters.
The problem is that Mr. Trump’s tariff program would energize and empower these elites. By directing government to impose levies on allies and adversaries alike, he’d be giving more strength to the swamp monsters he’s supposed to be defeating.
When Washington wants to impose new taxes, including tariffs, the companies and people who would be affected rush to trade associations, public-relations firms and lobbyists for help. These outfits then encourage their clients to make sizable donations to elected officials and their political-action committees. That doesn’t ensure the elected officials will take the company’s side, but it can often open their doors for access.
Lobbyists then set up meetings and expensive meals with congressmen, their staffs, high-ranking bureaucrats or those who know them—especially former congressmen or Hill staffers now working for other lobbying firms. The supplicants plead their cases at these swanky dinners, explaining why they should be exempted from new tariffs or why their competitors shouldn’t be.
The higher the stakes, the more time and money the companies are willing to spend. With Mr. Trump’s proposed tariffs—10% to 20% on all imports, 25% on Canada and Mexico, and up to 60% on China—the stakes have never been higher.
Regardless of whether companies get what they want from their meetings, they usually conclude that they need to keep the messaging and money flowing for a while. We have only a vague idea how much money is actually changing hands, who is spending it, where it’s going, and whom it’s helping. We do know, however, that it’s hurting the American consumer.
Don’t blame the businesses. They’re understandably trying to avoid paying higher taxes, most of which would be passed on as higher prices to their customers.
We saw this play out in response to Mr. Trump’s tariffs during his first term. When he imposed strict steel and aluminum tariffs in 2018, thousands of U.S. companies lobbied the Commerce Department to end the tariffs or exempt their operations. Some companies exempted from the tariffs lobbied the Commerce Department to keep them in place on their competitors.
As his tariff regime expanded, the number of companies deploying lobbyists in Washington tripled. According to the Journal, there were roughly 100 groups lobbying on tariff issues when Mr. Trump took office. By June 2018, there were nearly 450. Imagine how many more there will be if his second-term tariff program is as expansive as he’s promising.
There is still a chance Mr. Trump is using these threats as bargaining tools to get Mexico, Canada, China and other countries to make concessions. But no one knows for sure. It may also be that he will use tariffs to extract concessions from some countries and impose them arbitrarily on others.
What we do know is that if Mr. Trump moves forward with his blanket tariff proposals, the Washington swamp will be bigger and slimier than ever.
Mr. Matthews is co-author of “On the Edge: America Faces the Entitlements Cliff.”
