Warren, Smith Call on Trump Trade Nominees to Ensure Tariffs Are Not "A Corrupt Giveaway to the Wealthy and Well-Connected"

Trump's first term tariffs were a cesspool of shady backroom deals, and "corporations are making crystal clear that they are ready to wheel and deal their way to tariff exclusions again."

"President-elect Trump …pledge(s) to impose these tariffs on day one of his presidency… (and) the American people deserve answers now on how this time around will not be more of the same."

Text of Letter (PDF)

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs and member of the Senate Committee on Finance, and Tina Smith (D-Minn.), also a member of the Senate Committee on Finance, wrote to Commerce Secretary nominee-designate Howard Lutnick and United States Trade Representative (USTR) nominee-designate Jamieson Greer, seeking clarification on their tariff strategy, whether they plan to adopt any tariff exclusions, and if so, how they plan to avoid a loophole giveaway to big corporations at the expense of American workers and small businesses.

President-elect Trump announced last month that on inauguration day, he "will sign all necessary documents" to impose a 25% tariff on goods imported from Mexico and Canada, as well as a 10% tariff on Chinese imports.

But the Senators warned that, "Big corporations do have a plan: secure tariff loopholes to protect their profits. Corporate lobbyists are already lining up …President-elect Trump has pledged to impose these tariffs on day one of his presidency, and the American people deserve answers now on how this time around will not be more of the same: a corrupt giveaway to the wealthy and well-connected."

While President Trump talked tough on tariffs in his first term, his trade officials handed out exemptions in arbitrary, unfair, and shady backroom deals. Lobbying on trade skyrocketed, and it clearly paid off for a favored few, like Apple and even a Russian oligarch. An investigation by Senator Warren's office found that companies headquartered in Japan and China were over three times more likely to have their exemptions approved by the Commerce Department than American-owned companies.

The Commerce Department's Inspector General found that trade officials made decisions based on "off-record" communications and secretly changed exemption criteria following lobbying of a favored party, giving "the appearance of improper influence," and concluded that the Trump administration's process was "neither transparent nor objective."

The USTR Office had similar issues with its tariff exclusions process. The Government Accountability Office found "inconsistencies" in USTR's application review. An independent analysis also found that USTR favored politically-connected companies, making its process "a very effective spoils system allowing the administration of the day to reward its political friends and punish its enemies."

President-elect Trump has promised to impose new tariffs on "ALL products," but Mr. Lutnick has not clarified how he will make such determinations and what differences, if any, there will be from the previous problematic tariff exclusions process.

"Concerns have also been raised about your use of your position as transition co-chair to benefit your investment firm, making it all the more important for you to clarify how the Trump transition plans to approach any tariff exclusions process, including recusing yourself from any decisions that raise conflicts of interest," wrote the senators.

The senators asked the two nominees to answer questions about their plans to implement tariffs, a potential exclusions process, and asked them to commit to implementing a "transparent and objective process that protects America's small businesses and workers" by January 21, 2025.

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