U.S. companies that donated to the Republican Party were more likely to receive tariff exemptions during the last Trump presidency, as part of a process that’s reportedly become increasingly vulnerable to “political distortions.”
An academic study from a collection of U.S. business schools found that although 14.6% of the 7,000-plus exemption applications for Trump’s 2018 tariffs against China were approved, that number jumped to 18.5% for businesses that had made significant contributions to the GOP, compared to just 11.2% for companies that donated to primarily to the Democratic Party.
Read More: The Trouble With Trump’s Tariffs
“Our evidence on campaign contributions strongly suggests that politicians are effectively using exemptions to reward supporters and withholding exemptions to punish supporters of their opposition,” the study reads, going on to describe the presence of a “perverse incentive” for companies to offer their political support in exchange for favorable treatment.
Trump has threatened to enact tariffs against China, Canada and Mexico in his upcoming second term, sparking concerns over running afoul of the United States’ most prominent international trade partners. That said, U.S. businesses have contributed millions to Trump’s inauguration fund, which could increase the chances of those companies getting exempted from new levies, the study theorizes. Fordham University professor and study co-author Grace Lee also noted that even in instances where the dollar amount of donations don’t seem significant, “the benefits could be large.”
