Tags: charles koch | trump | tariffs | trade

Charles Koch: Business Leaders Must Reject Trump Tariffs

Charles Koch: Business Leaders Must Reject Trump Tariffs
(Photo courtesy of Koch Industries)

By    |   Thursday, 08 March 2018 12:07 PM

Charles Koch, the billionaire chief executive of Koch Industries who has donated millions to conservative candidates, said President Trump’s plan to place tariffs on imported steel and aluminum undermines the positive effects of tax reform.

“Without a doubt, those who can least afford it will be harmed the most,” Koch said in a Washington Post op-ed. “Having just helped consumers keep more of their money by passing tax reform, it makes little sense to take it away via higher costs.”

President Donald Trump signaled on Thursday that he was intent on approving the tariffs, despite lingering legal questions and resistance from Republicans and major U.S. allies.

The stock market, which the president has cited as a key barometer of the positive effects of his policies, sold off last week after he announced tariffs of 25 percent on steel imports and 10 percent on aluminum.

The S&P 500 dropped 2 percent from the most recent peak on Feb. 27 to 2,734.62 on Thursday morning. The stock index reached an intraday peak of 2,872.87 on Jan. 26 before dropping about 12 percent in the following two weeks.

"Looking forward to 3:30 P.M. meeting today at the White House," Trump wrote in a tweet on Thursday. "We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military."

Koch said no one should assume that he favors tariffs because he runs a conglomerate whose interests include steel.

“If we are to have a system in which businesses can succeed long term, policies must benefit everyone, not just the few,” he said. “Unfortunately, tariffs are not the only problem. Our entire economy is rife with cronyism, resulting in regulations and subsidies that are destroying competition, opportunity and innovation.”

Koch cited his company’s efforts to end direct subsidies of ethanol, the cleaner-burning gasoline additive made from grain, even though his company is one of the biggest ethanol producers in the U.S. The company also opposed a border-adjustment tax that would have targeted imports.

Koch wasn't a Trump supporter during the election, once likening the choice between the Republican candidate and Democratic rival Hillary Clinton to selecting “cancer or heart attack.” Koch said “it’s possible” another Clinton in the White House could be better than having a Republican president, but he didn't endorse her.

Writing in The Wall Street Journal a day before Trump’s inauguration, Koch implored the new administration to eliminate cronyism, reform the criminal justice system, encourage innovation and to “always listen, especially to those who disagree. Respect and toleration are the hallmarks of a free society and essential for making new discoveries.”

Trump ran on a pro-business platform of cutting taxes and regulation, boosting jobs growth and spending $1 trillion on infrastructure like roads and bridges. But Trump also was highly effective at tapping into populist discontent with his pledge to do something about the massive trade deficit that he blamed for sending American jobs and wealth overseas.

Trump's message was especially popular among blue-collar workers who never recovered from the 2008 financial crisis that accelerated the decline of America's middle class. One of Trump’s first actions as president was to withdraw the United States from the 12-nation Trans-Pacific Partnership that was backed by the Obama administration.

Proponents of the tariffs, such as former steel company chief executive Dan DiMicco, said it's pollyannish to not recognize that the U.S. has been in a trade war with China for years.

“They’ve been cheating," he said of China. "They steal our IT. They cheat on the products. They subsidize. They manipulate their currency. We’ve been in a trade war, and we’re the ones that have been decimated because of this.”

Conservative commentator Pat Buchanan also supports tariffs that would encourage companies to invest in the U.S. and hire American workers.

"We should tax foreign-made goods and use the revenue, dollar for dollar, to cut taxes on domestic production," he said. "The idea is not to keep foreign goods out, but to induce foreign companies to move production here."

A George Washington University battleground poll found that 52 percent of likely voters had never heard of Charles Koch and his brother David.

The poll, conducted by the Tarrance Group and Lake Research, also found that 25 percent of Americans had an unfavorable impression of the Kochs, while 12 percent had a favorable one. Eleven percent had no opinion.

Koch said consumers will be most harmed by tariffs, which only lead manufacturers to raise prices that hit people in the pocketbook.

“Tariffs will not add thousands of American jobs,” Koch said. “They also reduce choice, competition, innovation and opportunity.”

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Charles Koch, the billionaire chief executive of Koch Industries who has donated millions to conservatives, said President Trump's plan to place tariffs on imported steel and aluminum undermines the positive effects of tax reform.
charles koch, trump, tariffs, trade
Thursday, 08 March 2018 12:07 PM
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