Companies are fighting Trump's tariffs in the corrupt system

Companies are fighting Trump's tariffs in the corrupt system

In 2018, Bobby Djavaheri, President of Yedi Houseware Appliances, had great concern about the fate of his family business because the Trump administration raised tariffs on Chinese air fryers. In order to avoid the 25%inch to Chinese imports, Djavaheri consulted a customs attorney and applied for customs exception to the United States trade officer (UstR). But like many other applications, the Yedi was quickly rejected.

The effects of customs policy on companies

"You didn't even give me an explanation," said Djavaheri, adding that his company based in Los Angeles had to dismiss employees and cancel expansion plans. "We were on the rising branch. And this fact has brought our growth to a standstill." Many US companies have tried to bypass the costs of tariffs to China and often fail. This reflects the frustrations about a process introduced during the first Trump administration to issue customs exceptions, which is often described as opaque and chaotic.

Problems with the process of customs exceptions

"The exclusion process is broken. It is complicated and incredibly confusing," said Tom Madrecki, Vice President for Campaigns and Special Projects by Consumer Brands Association, a trading group that represents companies such as Coca-Cola and General Mills. In the meantime, President Donald Trump has promised to raise even larger tariffs in China in the coming months and years.

It is unclear how or when these higher tariffs will come into force on China - still whether companies will again have the opportunity to apply for exceptions. What is certain, however, is that the U.TR's exclusion process raised considerable concerns in the American economy during the first Trump administration.

criticism of political preference

legislators and companies expressed fear that the UsTR winners and losers selected. Some companies complain about an non -transparent process that could be susceptible to political preference - a suspicion that is documented by academic research.

The UtTR introduced an exclusion process in 2018 that should enable companies to take certain products from the tariffs on China. In order to receive a coveted exception, companies had to prove that the tariffs would cause "serious economic damage" for the company or US interests.

experiences with customs applications

Between 2018 and 2020, the USTR received around 53,000 applications for exceptions and rejected 87% from how to check the Government Accountability Office (GAO). This review stated "inconsistencies" when checking the applications by the UstTR and found that the authority had "not fully documented all of its internal procedures".

"The process is potentially corrupt because it enables winners and losers to result from a non -transparent decision," reported a company representative anonymously.

Scientific evidence of inequalities

Research shows that companies whose managers have provided donations to republican candidates had a better chance of recognizing their exceptions. Between 2018 and 2020, only 14.6% of companies that applied for exceptions were successful. However, the chance of success increased by almost four percentage points for companies that supported Republican candidates.

The results of the study suggest that the system allows the "government of the hour to reward their political friends and punish their enemies". The likelihood of receiving an exception fell for companies whose managers supported the opposing party. This led to a success of only ten percent for companies that supported Democrats.

demand for more transparency

To prevent corruption and to ensure a fair field, Salas called for the exclusion process to be significantly more transparent and supervision by the congress. Although a "transparent and open" exclusion process has been running since Biden took office in 2021, there are still concerns about political influences.

Dajavaheri said that he had to apply for customs exceptions again. "I have to - otherwise I am done," he said, rejecting Trump's claim that China would pay her tariffs. This claim contradicts studies that show that the Americans have borne almost the total costs of the last customs round in China.

The urgency for companies

"This is ridiculous. I can show you my bills. I get the bills," said Djavaheri. The upcoming tariffs represent a real threat to many US companies, and the need for a clear, fair and more transparent exclusion process is more important than ever.