Big Business Plans All-Out Blitz on Washington to End Trade War
(Bloomberg) -- Corporate America is taking the gloves off in its campaign to end President Trump’s trade war.
A coalition of more than 200 trade associations spanning agriculture, manufacturing, retail, technology, oil and even liquor will begin a new two-pronged attack next week to try to end the policies they see as damaging. The campaign, called Tariffs Hurt the Heartland, will involve blanketing Capitol Hill with farmers and other business owners, plus debuting an ad aimed at parents that essentially says the trade war might be endangering babies.
The escalation comes at a crucial time: The president and Chinese officials are meeting this week with just a month to go before U.S. tariffs on $200 billion of Chinese imports are slated to more than double to 25 percent. It also marks a shift in strategy. After a year of struggling to directly sway Trump and his inner circle, including running ads on Fox News -- his favorite cable channel -- corporate lobbyists are ratcheting up pressure outside the White House.
“People have to think through different strategies because the normal operating procedure doesn’t work,” said Matt Priest, chief executive officer of the Footwear Distributors and Retailers of America, which is part of the wider coalition. “Some of that strategy is paying off, but the response isn’t the response we would’ve liked.”
Next week, about 100 executives and business owners from companies big and small will visit Washington to lobby Congress, especially the large freshmen class -- mostly Democrats -- that may still be formulating their stances on trade. Support is also needed for a bipartisan bill intended to rein in the president’s trade authority.
The group descending on Washington includes people like Brent Bible, who runs a 5,000-acre corn and soybean farm in Romney, Indiana. Soybeans were hit by retaliatory Chinese tariffs last year, pushing down prices to a point where farmers no longer make money. His farm also took a hit when U.S. levies on steel and aluminum made equipment pricier.
“Just get it fixed,” said Bible, who holds an economics degree. If this dispute goes on much longer, he said he worries about a “snowball effect” that could make soybeans almost worthless. Bible voted for Trump but said his support has waned in recent months. “If we don’t get a deal soon, then we are looking at a major long-term impact.”
This coalition was formed in September, and its activities so far have included hosting anti-tariff events across the country that generated local media attention and publishing stats on the impact of the trade war. The new push takes that further. It will include a press conference on Feb. 6 with a bipartisan group of senators, including Democrat Mark Warner and Republican Pat Toomey, who crafted the bill to reduce presidential trade powers.
The coalition also had a new ad that tries to tug at the heartstrings of Americans by getting them to feel the pain it says Trump’s trade war is causing. The spot, which will first run online in Washington and swing states like Ohio and Pennsylvania, features Cribs for Kids, a Pittsburgh-based charity that sells 100,000 low-cost portable baby beds a year to local governments and hospitals. The partners then give them to low-income families, who might not have one otherwise.
In the ad, the nonprofit’s executive director, Judy Bannon, says Trump’s tariffs are increasing costs for the cribs it imports from China. The charity has already seen a decline in orders after a 10 percent levy on Chinese goods last year, Bannon said in an interview. She paints the impact in life-and-death terms, saying that getting babies to sleep in cribs and on their backs -- a message reinforced on the charity’s cribs -- reduces Sudden Infant Death Syndrome.
“As a nonprofit, we never thought tariffs would affect us, but they do,” Bannon says in the 30-second video. The spot also tries to drive home the point that tariffs are essentially taxes on U.S. companies, despite Trump’s Twitter proclamations that China is the one paying the duties. “President Trump says that China is paying these tariffs, but I see the cost on my invoices.”
Despite strong opposition from corporate America and the lobbying infrastructure it bankrolls, thwarting Trump on trade hasn’t been easy. The impact of the tariffs is still small when compared with the overall U.S. economy and hasn’t resulted in widespread price increases for consumers. Several lobbyists noted that the government shutdown ended only when airports were disrupted, and that kind of bellwether event hasn’t materialized yet with tariffs. The administration has done its part by avoiding hitting consumer products directly to blunt public outcry.
And because the trade war is promoted by the White House, most of America’s CEOs have remained publicly silent, for fear of getting criticized publicly by Trump or raising the ire of the administration officials overseeing tariff exemptions. That’s a far cry from 2017, when executives complained on TV and in congressional testimony in a successful bid to kill the border-adjustment tax backed by former Republican House Speaker Paul Ryan.
To be sure, there have been victories in corporate America. Lobbyists for farmers, seen as a crucial part of Trump’s base, pushed the administration to authorize $12 billion in relief funds after Beijing retaliated with its own tariffs. Trade groups also got plenty of items taken off the final tariff lists, including car booster seats for kids. They also point to Trump delaying the next tariff hike by two months to March to allow for more negotiations.
The timing of this escalated opposition could be helpful. The president just took a hit from the government shutdown. The political calendar has already turned to the 2020 presidential race, and Trump needs a strong economy for his re-election bid. That story is harder to tell with almost daily reports of U.S. companies -- from Apple Inc. to Stanley Black & Decker Inc. -- partly blaming weak results on the trade war.
“A lot things are coming to a head,” said Gary Shapiro, CEO of the Consumer Technology Association, another coalition member. With Trump’s re-election bid looming, “do you think he’s going to risk a stock market fall over a 25 percent tariff -- at this point? But I don’t know anyone who has been right calling Trump’s moves.”
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