Business pulling out all stops against Trump tariffs
June 24, 2019
Businesses are pulling out all the stops to counter President TrumpDonald John TrumpFormer Joint Chiefs chairman: ‘The last thing in the world we need right now is a war with Iran’ Pence: ‘We’re not convinced’ downing of drone was ‘authorized at the highest levels’ Trump: Bolton would take on the whole world at one time MORE‘s tariffs as the U.S. trade war with China intensifies.
Trade associations are pressing the administration to reverse course on the escalating tit-for-tat tariffs. Companies across different industries are also uniting forces and forming new coalitions to make their case in Washington. And lobbyists who specialize in trade issues are busy as companies enlist them to seek tariffs exemptions
The frenzy of activity is part of multi-pronged approach as businesses tackle Trump’s trade agenda.
“Strong trade association participation for those issues that are industry-wide concerns, the individual aspect where a company or organization has its own interest and own brand, and then those smaller alliances or coalitions,” said Ilisa Halpern Paul, president of the District Policy Group at Drinker Biddle. “Many times we have clients who are doing all three at once.”
The activity is coming at a critical stretch in the trade fight.
U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerChinese, US negotiators fine-tuning details of trade agreement: report The Trump economy keeps roaring ahead Trump says no discussion of extending deadline in Chinese trade talks MORE updated Congress this week on Trump’s revised North American trade deal, which Democrats are seeking changes to ahead of a House vote, and Trump’s plans to resolve the deadlock in China trade talks. Trump has threatened $300 billion more in China tariffs and plans to sit down next week with Chinese President Xi Jinpin.
In the past, some companies would have just relied on trade associations to push back on the president’s policies and seek relief. But that’s not seen as enough in the current trade fight.
Because of the complicated nature of the trade rules and tariffs, companies — particularly startups and midsize businesses — are seeking lobbying firms to aid them with specific matters.
“There are occasions where a company or an organization has a very specific issue that is unique to them and it’s not something that the trade association would take on because it’s really specific to only one of its members, so that really requires an individualized effort,” Paul said.
Frank Samolis, co-chair of international trade practice group at Squire Patton Boggs, said trade issues, in particular retaliatory tariffs from China and other countries, were a significant threat to smaller businesses
“A smaller company is going to be affected even to a greater extent — given their size — by a China retaliatory tariff. If they want to get excluded, they’re forced to take this on on their own and hire their own counsel,” he said.
Trade associations can’t give companies the individualized help they need with the flurry of trade activity, he argued.
“What the Trump administration has done has put more emphasis on the difference between an association and an individual company,” Samolis said. “For a specific company, they have to have an individual advocate. I think what Trump has done certainly has expanded that kind of work for individual clients.”
Lobbying shops can also provide detailed insight for a company that an association may not have the bandwidth or ability to do, Brian Johnson, a principal at the Vogel Group, argued.
“The trades lobby on overall policy, which is certainly needed,” he said. “However, we are able to more surgically go in and craft not only a narrative around specific clients.”
“The associations are still very active and can be very effective on the broader, big picture issue, like what should be our policies on China on trade? Are the tariffs a good thing?” Samolis said.
But Samolis added, “A lot of the detailed issues are company specific.”
Lobbying firms are also increasingly adding public affairs arms so clients can make their case to the public. A lobbyist familiar with trade associations said that public affairs efforts were important in an era where the president often turns to social media to tout his policies.
“Trump’s making policy on Twitter, he’s holding people accountable on Twitter, he’s leveraging issues. He’s also using Twitter to call out individual companies. The public affairs piece becomes important, maybe more so than it was before,” the lobbyist said.
The larger business groups, like the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM), are also active, providing a megaphone and resources that many lobbying firms and businesses wouldn’t have on their own.
“It all comes down to the value proposition, and for us that means not just having a solid government relations practice but also a strong brand our members can leverage,” said Jordan Stoick, NAM’s vice president of government relations.
“It also means offering companies a wide range of services such as issue advocacy campaigns, legal support as well as operations and technology solutions so we can be a one-stop-shop for their needs.”
Dozens of trade associations, including the National Retail Federation, National Restaurants Association and Natural Products Association, signed a letter earlier this month against new China tariffs.
And those groups play an important role in coordinating efforts in the trade fight.
“The most effective lobbying strategy is to ensure there is coordination between trade associations and outside firms,” said Beer Institute President and CEO Jim McGreevy. “The only way you get wins is if you’re all rowing in the same direction. That’s one of the many benefits of trade associations – we represent and advocate for the whole industry.”
And the trade fight shows no signs of easing.
David Tamasi, former finance chairman for the Trump Victory Fund, said on Wednesday that the trade war isn’t going away any time soon at an event hosted by his firm, Chartwell Strategy Group. Tamasi said there is no “political incentive” for Trump to cut a deal with China and that Congress would not challenge him on trade.
“There’s no political energy or appetite in the House… it’s a non-issue for them,” Tamasi said. “In the Senate, the leader is not going to go against the president,” with an election approaching.
Rory Murphy, an associate at Squire Patton Boggs, said the complicated trade picture meant companies need more resources than before.
“Trade policy has always been important to companies but it’s always been pretty big picture. Outside of the miscellaneous tariff bill, there wasn’t really avenues for companies to be advocating on specific products,” he said.
“Now there are so many more opportunities for companies to be specifically affected by trade policy.”