Lawmakers in Both Chambers Warn Reciprocal Tariffs May Create Quid-Pro-Quo Spoils System
Forty-seven senators and representatives, led by Sen. Elizabeth Warren, D-Mass., expressed concern April 16 that the Trump administration’s reciprocal tariff policies negotiations could become a spoils system.
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In a letter to the Commerce and Treasury departments and the U.S. trade representative, the lawmakers said that the tariffs pose incentives for corporations and sovereign nations to “quietly offer something in return” for exemptions or other changes. That money could be funneled to the president’s current business holdings -- which include his club, Mar-a-Lago, as well as his cryptocurrency and real estate ventures, the letter said.
USTR Jamieson Greer also was named head of the Office of Government Ethics in March, the letter observed. This “raises blatant conflicts that risk undermining OGE’s ability to independently monitor trade officials’ conduct,” it said.
The letter claimed a similar spoils situation was created by tariffs imposed during Trump’s first term in office. Companies that donated to Republican candidates for office “were more likely to be granted tariff exemptions,” it said. And a 2018-19 audit of first-term tariffs, conducted by the Commerce Department's Office of Inspector General, discovered “off-record communications” and apparent “improper influence in decision-making for tariff exclusion requests,” it said.
The letter noted that President Donald Trump said he would make exemptions under the new reciprocal tariffs “instinctively” and has already “bragged about global leaders ‘kissing [his] ass’ in search of deals.”
For example, it said, Trump recently exempted “smartphones and certain other high-end electronics” from the tariffs on Chinese imports, explaining that he had recently “helped Tim Cook,” CEO of Apple.
Further, the “off-and-on nature” of the tariffs may also allow insider trading on the stock market, it said.
It asked the two department heads and USTR to respond, by April 29, to a number of questions regarding the “official process” for creating tariff exemptions.