Escaping Trump's tariffs has required navigating a ‘broken' system vulnerable to corruption, businesses and academics say

Tariff Troubles: US Businesses Wrestle with Impacts #

In 2018, Bobby Djavaheri, president of Yedi Houseware Appliances, was alarmed by the existential threat posed to his family’s business due to new tariffs imposed on Chinese air fryers by the Trump administration. Hoping to evade the 25% levy, Djavaheri sought a tariff exclusion from the U.S. Trade Representative, but the application was denied without explanation. Consequently, his Los Angeles-based company laid off workers and abandoned expansion plans.

Many U.S. businesses struggled similarly to cope with the costs imposed by tariffs on Chinese goods. Concerns about the opacity of the tariff exclusion process emerged, with accusations of political favoritism muddying the system. From 2018 to 2020, the USTR received around 53,000 exclusion requests, denying 87% of them. Questions arose over the fairness and transparency of decisions made, with allegations that political donations might influence outcomes.

The Trump administration vowed to intensify tariffs on China, though the timeline and details were uncertain. Businesses were anxious about whether options to apply for exclusions would be available again. A potential lack of transparency led to fears that exclusions might favor special interests.

Amongst the controversies surrounding tariff exclusions, research indicated that firms with executives backing Republican candidates during the Trump era saw increased success rates with exclusion approvals. This skew suggested a significant political influence in the exclusion process, as firms with executives backing Democratic candidates faced reduced chances of success.

The murky process left many companies in jeopardy, where the difference between securing an exclusion and not could influence their survival. Firms that secured exclusions saw combined market value gains of $57 billion. Many, including retailers, began strategizing to mitigate the impending tariff impacts through legal, lobbying, and grassroots efforts.

Djavaheri, recognizing the necessity, expressed determination to apply for exclusions again, despite skepticism about tariffs being absorbed by China. “I have to—otherwise I’m dead,” he remarked, emphasizing the burden of costs falling on American companies.