Conservative billionaire brothers David and Charles Koch and their political network announced they are funding a campaign opposing U.S. President Donald Trump’s trade tariffs, in a move that could “open the flood gates.”
Freedom Partners Chamber of Commerce, Americans for Prosperity and the LIBRE Initiative announced Monday “a multi-year, multimillion-dollar initiative” to oppose the tariffs announced by the Trump administration last week.
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“The Trump administration has taken some incredibly positive steps for the American economy, but tariffs will undercut that progress and needlessly hamstring our full economic potential,” Americans for Prosperity president Tim Phillips said in a statement. “There are better ways to negotiate trade deals than by punishing American consumers and businesses with higher costs. Instead of pursuing protectionist policies that we already know don’t work, let’s help everyone win by expanding trade, opening new markets and lowering costs.”
Last week, Trump imposed tariffs on steel and aluminum imports from Canada, Mexico and the European Union and has threatened tariffs on up to US$200 billion in Chinese imports, raising the potential for retaliation in a dispute involving the globe’s two largest economies.
The Canadian government retaliated with dollar-for-dollar tariff “countermeasures” in the wake of the U.S. tariff announcement.
Carleton University’s Sprott School of Business professor Ian Lee suggests by the Koch brothers “excreting their power and wealth in challenging Trump,” others may follow.
Peter Loewen, the director of the University of Toronto’s School of Public Policy and Governance, agrees that the Kochs’ move is to put pressure but likely won’t have any effect on Trump.
“I think the main effect of the Koch brothers’ intervention is to put pressure on congressional Republicans — to send a signal to them that they should push for the core principle of free trade,” Loewen said. “It likely won’t do anything to persuade the president directly.
Loewen said it’s likely other top business brass are putting pressure on the Trump administration over the tariffs.
“It’s easy to imagine why: the only beneficiaries of steel tariffs are steel manufacturers,” he said.
“Anyone who uses steel is now paying more.”
The Kochs kept their distance from Trump during the 2016 presidential election. Charles Koch spoke out against Trump’s proposed Muslim registry.
However, the Kochs found common ground with the new Republican president on issues including rolling back federal regulations and pulling out of the Paris global climate accord, after the election.
Senate Republicans have warned that the tariffs could dampen the economic gains from the GOP tax cuts and sour the mood among voters as lawmakers campaign to protect the Republican majority in Congress in November midterm elections.
Lee suggests with the Kochs stepping out against Trump, the “Republicans will be very interesting to watch,” leading up to 2020.
Trump’s trade plans have worried some Republican lawmakers who strongly back principles of free trade, warning that Trump could trigger a trade war that would destabilize the economy and ultimately hurt American workers.
On Tuesday, Republican Senator Bob Corker said he plans to introduce legislation that would require the president to seek Congress approval before imposing tariffs on national security grounds.
“We plan to offer either later today or in the morning a bill that would redefine the 1962 trade act, as it relates to 232, the national security component,” Corker said.
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The Koch-backed campaign “will include paid media, activist education and grassroots mobilization, lobbying and policy analysis – all intended to transform the way Washington and the rest of the country consider and value trade with other nations.”
–-with files from Reuters
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