Nicole Bivens Collinson’s phone hasn’t stopped ringing in the days since Donald Trump, the president-elect, won the election.
Collinson, who assists in leading the Sandler, Travis & Rosenberg lobbying firm’s international trade and government relations division, said she is receiving “dozens and dozens and dozens” of calls from worried American businesses trying to find exemptions and loopholes to shield themselves from Trump’s strict tariff plans.
“Everyone is calling,” Collinson said to CNBC. “It never stops.”
Trump made universal tariffs a central component of his economic policy during the 2024 campaign, proposing a 20% tax on all imports from all nations, with a particularly high 60% rate for Chinese commodities.
Just as countries were recovering from inflation spikes during the epidemic, economists, Wall Street experts, and industry executives were alarmed by this overly protective trade strategy, warning that universal tariffs may raise production costs and, consequently, consumer prices.
“Retailers and many other U.S. businesses have been alarmed by the threat of tariffs,” David French, senior vice president of government relations at the National Retail Federation, told CNBC. “Since President Trump won the nomination, our members have been preparing backup plans.”
That opinion was shared by Ron Sorini, a principal at the lobbying company Sorini, Samet & Associates, who stated that he receives at least two to three calls every day from businesses expressing worries about the potential tariff ramp-up, particularly in China.
[Businesses] wonder how to get the components out [of China] and where they should go. How do they extract the entire supply chain? “Sorini said.”
Securing an exception became a golden ticket in business America when Trump announced his first round of tariffs on China in 2018. This allowed companies to protect their supply chains headquartered in China without having to incur the high cost of relocation.
And it pays to know the proper people to get that golden ticket.
Applications for Trump’s first-term tariff exemptions were more likely to be granted if they originated from lobbying companies whose staff members had donated to the Republican Party, according to a 2021 study.
Now that Trump is expected to win the presidency again in a few weeks, tariff increases are becoming more inevitable.
The competition to identify the best lobbyists to assist businesses network with the appropriate individuals and get an edge in obtaining tariff loopholes is also going on in corporate America.
One of the authors of the 2021 research, Veljko Fotak, a professor of finance at SUNY Buffalo, told CNBC, “Firms are prepared.” “The attorneys and lobbyists will be the true beneficiaries of this process.”
It’s unclear what tariffs will look like under the incoming Trump administration and whether exemptions would be offered at all.
“Businesses will need to prepare for a range of scenarios until that clarity comes,” Tiffany Smith, the National Foreign Trade Council’s vice president of global trade policy, told CNBC.
Trump transition team spokeswoman Karoline Leavitt reaffirmed the president-elect’s campaign pledges in response to CNBC’s request for comment about the Trump team’s exemption plan and businesses’ worries about the proposed tariffs.
“President Trump was mandated to carry out the pledges he made throughout the campaign after the American people overwhelmingly re-elected him. In a statement, Leavitt assured CNBC, “He will deliver.”
Businesses have been attempting to up barriers against Trump’s more assertive trade policies in the interim. These include seeking to shift production out of China, preparing price increases so they may pass the expense of import levies on to customers, and temporarily hoarding goods.
Steve Madden promised on Thursday to cut its imports from China by 45% over the course of the following year in preparation for Trump’s proposed tariffs.
However, leaving China is a big task for many American businesses, particularly small ones that do not have the purchasing power or leverage to shift production so quickly.
I would strongly advise people to consider the effects on small enterprises. They are the ones who are actually suffering. Sorini of Sorini, Samet & Associates told CNBC, “There must be a way to support businesses like that.” “Because they are genuinely incapable of doing it alone.”
