The article expresses concern over the potential for crony capitalism under a Trump administration, focusing on the anticipated application of tariffs and the subsequent granting of exemptions.
It highlights the broad discretion given to the executive branch in setting tariffs, creating opportunities for political favoritism in granting exemptions. The author suggests that the criteria for granting these exemptions may be based less on genuine economic hardship and more on political contributions and connections to the Trump administration.
A statistical analysis is cited, demonstrating that during Trump's first term, companies with ties to the Republican party were more likely to receive tariff exemptions. This analysis serves as evidence of the existing pattern of political favoritism.
The article argues that Trump's proposed tariffs are of far greater scope and higher magnitude than those previously implemented, leading to concerns about a significant increase in political favoritism in the exemption process. The potential for abuse is thus heightened significantly.
Ultimately, the article warns that this situation represents a significant threat to fair economic practices and hints at a worrying trend of cronyism within the American political landscape under a Trump presidency.
It’s late 2025, and Donald Trump has done what he said he would do: impose high tariffs — taxes on imports — on goods coming from abroad, with extremely high tariffs on imports from China. These tariffs have had exactly the effect many economists predicted, although Trump insisted otherwise: higher prices for American buyers.
Let’s say you have a business that relies on imported parts — maybe from China, maybe from Mexico, maybe from somewhere else. What do you do?
Well, U.S. trade law gives the executive branch broad discretion in tariff-setting, including the ability to grant exemptions in special cases. So you apply for one of those exemptions. Will your request be granted?
In principle, the answer should depend on whether having to pay those tariffs imposes real hardship and threatens American jobs. In practice, you can safely guess that other criteria will play a role. How much money have you contributed to Republicans? When you hold business retreats, are they at Trump golf courses and resorts?
I’m not engaging in idle speculation here. Trump imposed significant tariffs during his first term, and many businesses applied for exemptions. Who got them? A recently published statistical analysis found that companies with Republican ties, as measured by their 2016 campaign contributions, were significantly more likely (and those with Democratic ties less likely) to have their applications approved.
But that was only a small-scale rehearsal for what could be coming. While we don’t have specifics yet, the tariff proposals Trump floated during the campaign were far wider in scope and, in the case of China, far higher than anything we saw the first time around; the potential for political favoritism will be an order of magnitude greater.
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