Executive Summary

In 2018, when the Trump administration imposed tariffs on certain imports from China, it also set up an exclusion process – ostensibly to protect small businesses that would face an undue burden from Trump’s tariffs. 

But reports from government watchdogs and a new empirical study suggest that the opaque and chaotic process quickly overwhelmed government agencies and enabled a quid pro quo spoils system that rewarded the rich and well-connected. A revolving door of lobbyists, including former and future Trump administration officials, were able to secure lucrative tariff exceptions for their CEO clients through political pressure, informal meetings, and campaign contributions. 

• Internal government audits described the exemption process as “neither transparent nor objective.” 
• Trump wielded tariffs and tariff exceptions to reward his friends and punish his enemies. CEOs that donated to Republicans had a 1 in 5 chance of having their exemption request granted, versus 1 in 10 for CEOs that supported Democrats, according to a January 2025 study. 
• Many of the companies that successfully won exemptions had ties to the Trump administration and/or hired expensive lobbyists to grease the wheels, with 2018 and 2019 breaking records for the number of lobbyists paid to work on trade issues.

Specific outcomes of this process include:

• Apple CEO and Trump sycophant Tim Cook received exemptions for the infamously made-in-China iPhone and other products.
• A Russian oligarch with ties to Vladimir Putin was granted a tariff exemption, which was revoked following a wave of public backlash.
• Delays in enacting certain tariffs suggest Trump temporarily withheld them just long enough to extract personal benefit, such as a million-dollar fireworks donation for a controversial taxpayer-funded rally and patent approvals from Argentina for his holdings company. 

Trump will likely double down on punishing his enemies and enriching himself and his friends in his second term, but dismantling watchdog agencies and boosting big business ties sets the stage for it to be even more corrupt and harmful to workers, consumers, and the U.S. and global economy. There are already major warning signs from his First Buddy Elon Musk for how this will all come crashing down.

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Trump Loves Tariffs, Just Not for the Rich and Well-Connected

Self-Dealing, Corruption, and Grift in Trump’s First-Term Tariff Exceptions

Trump talks a big game about helping working people and uses tariffs as his go-to example. While tariffs can be an effective tool for punishing bad corporate behavior and protecting American jobs when part of a strategic industrial strategy, Trump’s reckless tariff plan would do nothing of the sort. Trump’s negligent plans to wield tariffs like a schoolyard bully while distracting from massive corporate tax cuts will be counterproductive and provide enormous opportunities for cronyism and grift.  

During his first term, Trump wielded tariffs and tariff exceptions to reward his friends and punish his enemies, and the exemption process quickly overwhelmed the already understaffed agencies. Trump will likely double down on punishing his opponents and enriching himself and his friends in his second term, but dismantling watchdog agencies and boosting big business ties set the stage for even more corruption and harm to workers, consumers, and the U.S. and global economy.

An Opaque and Capricious Process 

In 2018, when the Trump administration imposed tariffs on certain imports from China, it also set up an exclusion process. Companies operating in the U.S. could submit applications explaining why they should be excluded from the tariffs, for example, because a certain product was only available from China or because imposition of tariffs on a product would cause severe economic harm to the company or to U.S. interests. 

Exclusions to tariffs should be granted through rigorous application, review, and appeal processes that are meticulously documented and publicly reported by the office responsible for the tariff, either the U.S. Trade Representative (USTR) or the U.S. Department of Commerce. 

Instead, Trump’s tariff exclusion was characterized by government officials and businesses as closed and mysterious. An October 2019 memo from the Commerce Department’s Office of Inspector General flagged concerns with the process and advised the agency to increase transparency. The memo notes: 

Similarly, in July 2021, the U.S. Government Accountability Office (GAO) released a detailed report highlighting USTR’s flawed process:

A recent study found evidence that Trump officials may have abused this messy process to reward their political supporters and punish opponents. 

As a proxy to determine who political supporters are, we can look at publicly available information on campaign contributions. The Political Economy of Tariff Exemption Grants, conducted by researchers at the University of Buffalo, University of Oklahoma, Fordham University, and Lehigh University, reviewed nearly 7,000 company exemption applications to USTR and found empirical evidence of a direct correlation between a company’s past contributions to Republicans and the likelihood of receiving an exemption. And similarly, a history of contributions to Democrats correlated with a decreased chance of securing an exclusion. “We estimate that a 1-standard-deviation increase in contributions to Republican (Democrat) candidates increases (decreases) the probability of approval by 3.94 (by 3.40) percentage points,” the report notes.

Roughly 1 in 7 companies applying for exclusions from 2018 to 2020 were approved. Those chances shot up to 1 in 5 if the company had contributed to Republican candidates, and dropped to 1 in 10 if they contributed to Democratic candidates.

The study found that in addition to campaign contributions, firms that spent more on lobbying had an increased chance of being approved. One of the researchers called the exclusions process “a very effective spoils system,” and warned that he “would not be surprised at all if this happened again.” Indeed, companies worried about possible tariffs are already seeking the assistance of a boutique industry of law firms, lobbyists, and consultants. 

“The lobbyists and the lawyers are going to benefit the most. We also think this is going to increase the political contributions to candidates. If you see the benefit, why not do it?” – Jesus Salas, study co-author and Associate Professor at the Lehigh University Perella Department of Finance.

The companies that received exclusions obviously benefited by not having to pay the relevant tariffs, but they also stood to benefit another way. According to the same study, public announcement of approval for an exclusion was associated with an abnormal stock price return of approximately 0.55% over the five-day window surrounding the announcement. In other words, the median firm that won approval was additionally rewarded with a roughly $51,000,000 increase in stock market value. 

“When you’re running a process that has no appellate review, there’s a lot of room for questionable behavior because there’s no one really checking the process. It’s common knowledge in town that the best way to get a leg up on an exclusion request is to get a Republican House or Senate member to call the White House.” – Anonymous Former USTR Staffer in Comments to ProPublica

Senator Elizabeth Warren, who has closely followed the paper trail since the inception of the tariff exclusion process, discovered another disturbing pattern. Eight in ten waiver requests granted by the Commerce Department went to foreign-headquartered companies, with less than 20% of waivers granted to U.S.-owned companies. 

In fact, companies headquartered in Japan or China were over three times more likely to get exemptions approved than American-owned companies. Despite President Trump’s 2016 campaign rhetoric describing Japan as “crushing” the U.S. in trade, over half of the steel tariff exemptions that his administration posted in the first 30 days of decision-making went to companies headquartered in Japan.

“This is utterly inexplicable and you owe the American people an answer for why after President Trump promised that his tariff program would help American companies,” Senator Warren wrote to Secretary of Commerce Wilbur Ross in 2018, “the process appears to be favoring foreign-owned firms with U.S. subsidiaries over American-owned firms by allowing them to import foreign steel.”

A Web Of Well-Connected Lobbyists

In a functioning democracy, public officials are charged with creating policies or fulfilling duties that serve the public interest. But these officials often leave government to work for private interests as lobbyists or strategic consultants on behalf of lobbying campaigns for special interests. This is known as the “revolving door” in which government officials rotate between public service and lucrative private-sector employment. The revolving door muddies the mandate of public officials, overlapping it with special and personal interests. Trump’s first term saw the highest rate of turnover, both in his Cabinet and his “A-Team” (the most influential positions within the executive office) in decades. So where did all these influential people go?

According to public disclosure data, 2018 and 2019 saw a record-beaking boom in clients lobbying on trade issues.

Untold money was spent on lobbying to gain the lucrative tariff exclusions and to challenge competitors’ applications – money not available to the small businesses Trump claims he wants to protect. Mike Elrod, a South Carolina small business owner: 

“I had every reason to believe they were talking about us,” Elrod said about the administration’s promise to spare U.S. companies from punishing tariffs if they could prove they had no other source for their inputs and their business would be gravely impacted.

“People our size, that don’t have K Street lawyers… We’re the ones that bear the brunt, we’re the ones that have the least tools in the box to work with.”

Those K Street lobbyists profited handsomely off of leveraging their ties to the White House to secure exclusions for their clients.

For example, Trump’s 2016 inauguration committee chief Brian Ballard was dubbed the “most powerful lobbyist in Trump’s Washington.” His firm was stacked with heavyweights, including Trump’s eventual 2024 Chief of Staff Susie Wiles.

Ballard and a colleague received $540,000 from Varian Medical Systems to lobby the White House, USTR, and Pence on trade issues. The cajolery included a meeting with Peter Navarro, Trump’s director of trade and manufacturing policy.

Four of Varian’s five exclusion requests were approved. According to Varian’s SEC filing, the exclusion boosted revenues by $23 million.

There’s also Trump’s once-White House Chief of Staff Reince Priebus (the same guy who violated White House policy of restricting political interference in pending investigations by urging the FBI to refute a report of Trump associates’ contacts with Russian intelligence).

After leaving the White House, Priebus became President of Michael Best Strategies. The Primex Family of Companies hired Priebus’ firm in 2018 to help “understand the [exemption] process” and make sure the requests were filed correctly. By the end of 2019, Primex had paid $120,000 for the firm to lobby on their behalf.

“You’re not gonna do it on your own. It’s suicide actually,” said Primex CEO Paul Shekoski.

About half of their 205 requests were granted. 

There’s also Trump fundraiser Marc Lampkin. Lampkin sits on the executive committee of the lobby firm Brownstein Hyatt Farber Schreck. Lampkin maxed out his individual contributions to Trump in 2016 and 2019 and has continued to generously support the candidate and his PACs. In a post-2016-election note to clients, the firm bragged that Politico named Lampkin a “‘need to know’ K Street Power player inside the Trump transition.”

Brownstein et al.’s PAC contributed twice as much to Republican candidates vs Democratic ones in the 2016 election cycle – $177,000 vs $88,500 – and between 2018 and 2019, more than 65% of the firm’s registered lobbyists were former government employees, AKA “Revolvers.”

The firm has a laundry list of dubious clients, working on behalf of Big Pharma corporations, Big Oil, a blacklisted Chinese tech company, Palantir, the Kingdom of Saudi Arabia and other foreign governments – all deep-pocket contracts with clients eager for White House contacts.

Outokumpu Stainless USA, a U.S. subsidiary of a Finnish corporation, paid the firm nearly a half-million dollars in 2019 and was granted over 500 exemptions.

Companies with deep coffers can pour hundreds of thousands of dollars on lobbying to file as many exemption requests as possible. On the other side of that coin is the understaffed government agencies that were swiftly overwhelmed by the tens of thousands of requests. The most prolific single requester, Alloy Tool Steel, put in nearly 40,000 requests for exclusions.

The hired guns needed for the sheer volume of requests created chaos. This chaos in turn created a vacuum for even more influence by the well connected to step in and get their kickbacks. 

This also raises huge concerns for the second Trump administration as he decimates the staffing of crucial agencies.

Selected Examples  

1. One firm’s rolodex of Trump allies and their successful campaign to win dozens of lucrative exclusions

Polaris, a global powersports manufacturer (think ATVs, off-roading vehicles, and the like) succeeded in getting over ⅔ of their 110 requests – meaning they will get back a substantial amount of the $90 million they paid in tariffs in 2019. Their story shows how a complex web of relationships with officials and lobbyists can help the well-connected sail through the complex exemption process. 

The Minnesota-based company lobbied relentlessly to get out of tariffs. Its CEO donated hundreds of thousands of dollars to Republican candidates, several others in Congress, and the administration. The employee PAC shows a strong preference for Republican candidates, especially through Trump’s first term.

Political spending by Polaris employees, Federal Election Commission

 Most voters would likely agree that their elected representatives should vote on legislation on the merits with their entire constituency in mind – but not Polaris. According to hundreds of emails procured by ProPublica via Freedom of Information Act (FOIA) request, the Polaris CEO told investors he was “trying to leverage votes for USMCA [the U.S. Mexico Canada Agreement] to help us get tariff relief.” 

“We continue to have community leaders ask why the Chairman [of the House Agriculture Committee Collin Peterson] is supporting USMCA given the outstanding trade issues in the district,” wrote Peterson’s LD to an assistant to the chief of staff at USTR. “It would be greatly helpful if I could talk to someone by early afternoon about the status of this issue.”

In May 2019, former reality TV star-turned Wisconsin representative (now Trump’s second-term Secretary of Transportation) Sean Duffy approached White House trade adviser Peter Navarro on behalf of Polaris, who then approached USTR for talking points in advance of a trip to Wisconsin.

Agency chief of staff (now Trump’s second-term USTR) Jamieson Greer personally inquired to get an update on Polaris’ exclusion requests. Former Bush White House official-turned lobbyist at Akin Gump et al., Justin McCarthy, emailed Greer on the Polaris case. “First, let’s grab coffee or a beer this month. Lots to chat about USMCA,” McCarthy wrote. “Second, see below from Polaris. Can you get this in front of the boss? Thanks!” Greer, who later joined Akin Gump, passed the message along.

Over the course of 2019, Polaris spent $800,000 on lobbying, including nearly a quarter of a million dollars to McCarthy’s firm, Akin Gump.

There were many more $1,000-$5,000 contributions to varying representatives that followed their advocacy on behalf of Polaris, whose deep pockets brought countless important eyes to their cases.

2. Tariff Exemptions For A Sanctioned Russian Metals Company With Ties To Russian President Vladimir Putin.

In April 2018, the United States imposed sanctions against then-president of United Rusal Company, Oleg Deripaska, and his businesses. Also in April of 2018, Rusal filed over 100 requests for exclusions. They were promptly met with nearly as many objections filed by American companies.

Rusal’s first 19 requests were denied, but its 20th request was granted by Trump’s Commerce Department on July 19th, 2018 – just three days after Trump’s Finland summit with Russian President Vladimir Putin. After lawmakers and American companies publicly objected to the exemption approval, the Commerce Department put the blame on a U.S. company’s “clerical error” when submitting its objection. Officials reversed the exclusion but never clarified why the approval was granted in the first place, even in the absence of a U.S. company objecting.

“The Trump administration granted this tariff exclusion, certifying no national security concerns, to a sanctioned subsidiary owned by a sanctioned Russian aluminum company, a mere three days after Trump’s surrender in Helsinki to President Putin,” said Rep. Lloyd Doggett of Texas. 

“This is not about the failure of one of those American companies to object, but about continuing, very objectionable favoritism toward Putin.” -Rep. Lloyd Doggett (D-Tex.) 

Senator Warren of Massachusetts sent a 10-page letter to the Commerce Department with concerns regarding the Rusal approval, explaining “The Trump administration undermined our national security by handing out a tariff exemption for millions of dollars of aluminum imports to a sanctioned Russian company — only to reverse this decision after my investigation revealed this giveaway.”

3. Special Privileges for Apple Products & Tim Cook

Apple CEO Tim Cook has a well known, amicable relationship with Trump – so much so that Trump praised him in 2019, saying Cook is a “great executive… Others go out and hire very expensive consultants, Tim Cook calls Donald Trump directly.” Cook even donated $1 million personally to Trump’s 2025 inauguration. The Wall Street Journal ran a front-page story shortly after the 2024 election, “How Tim Cook Cracked the Code on Working With Trump,” noted that the CEO spent years building a personal rapport with Trump.

Cook met repeatedly with Trump throughout his first term. On August 16th, 2019, the pair met for dinner and discussed a range of topics, including Trump’s tariff agenda. Trump reported that Cook made a “good case” for Apple to be excluded from a 10% tariff on Chinese electronic imports.

Despite Trump’s July 26, 2019 tweet a few weeks prior to their dinner that “Apple will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China. Make them in the USA, no Tariffs!” Many of Apple’s most lucrative products – iPhones, iPads, and MacBooks – were ultimately not subjected to the tariffs. A few months later, the administration granted exemptions for other products including the Apple Watch.

Senator Warren called out this behavior on Twitter in February 2025, connecting Trump’s second-term tariff plans with Big Tech’s prostration: 

4. Favors for Mick Mulvaney

Mick Mulvaney served several, often concurrent, roles in the first Trump administration. The then-congressman was tapped to lead the White House Office of Management and Budget while also director of the Consumer Financial Protection Bureau, then going on to serve as White House Chief of Staff and also special envoy to Northern Ireland. It’s difficult to overstate Mulvaney’s role in the administration and his personal relationship with Trump.

Prior to his role in Trump’s first administration, Mick Mulvaney represented Fairfield County in South Carolina. His district was home to the television assembly plant Element Electronics, which contributed nearly $25,000 to Mulvaney’s 2016 congressional race – an outsized sum compared to their other 2016 contributions. 

Despite his record of drawing a line between his new role serving the federal government and his past as a South Carolina congressman, Mulvaney openly lobbied the Commerce Department to grant a break to a South Carolina television assembly plant, Element Electronics.

Element won the lucrative waiver in September of 2018.

5. Tariff Exemptions to Extract Patent Approvals for Trump’s Own Company? Special Privileges for the Trump Family

When Donald Trump refused to divest from his businesses upon becoming president, defying the Emoluments Clause of the Constitution, he made a meager pledge to at least refrain from making foreign deals while in office. 

But a government ethics watchdog group has detailed one convoluted story out of many, in which Trump allegedly withdrew tariffs against Argentina while his company was seeking approval for a couple of patents. The watchdog organization Citizens for Responsibility and Ethics in Washington (CREW) tracked such indiscretions carefully throughout and after Trump’s first term, writing:

“As president, Donald Trump has flouted all kinds of norms, starting with his decision not to divest from his business interests while in office. That set the stage for an administration marked by self-interest, profiteering at the highest levels and more than 3,700 conflicts of interest.”

In late December of 2017, DTTM LLC (one of Trump’s holding companies) applied for two trademarks in Argentina. 

Soon after, in March of 2018, President Trump levied tariffs on steel and aluminum against most countries.

In April of 2018, shortly after the trademark opposition process closed, the U.S. reached a deal to eliminate the tariffs on Argentina specifically.

The trademarks were approved in November 2019 – the first trademarks from Argentina Trump received during his presidency.

Less than a month later in December of 2019, the tariffs on aluminum and steel from Argentina were reinstated.

6. Trump Delays Tariffs on Fireworks Just Long Enough to Accept Controversial Fireworks Donation 

Trump’s May 2019 announcement of tariffs on $300 billion in goods imported from China was met with much pushback from businesses, including the firework industry. 

Chinese companies manufacture ¾ of all professional display fireworks and 99% of backyard fireworks sold in the U.S. Phantom Fireworks CEO Bruce Zoldan and others met face-to-face with Trump in the Oval Office on May 22, 2019 to lobby against the tariffs. 

In late June the following month, Phantom Fireworks and Fireworks by Grucci donated an estimated $750,000 worth of fireworks, staff, and event displays to Trump’s 2019 “Salute to America” Independence Day celebration, which was widely criticized as a thinly veiled campaign rally organized with government funds. Phantom Fireworks CEO Bruce Zoldan reported to the Washington Examiner that the show would be worth more than $1 million if the two companies had charged the market rate.

The celebration invited heavy criticism from across the political spectrum. Prior to the festivities, Michelle Cottle of The New York Times, former Republican representative David Jolly, and radio host Charlie Sykes criticized Trump’s plans to co-opt the “non-partisan” holiday into a political event to promote his 2020 presidential re-election campaign.

Retired lieutenant general David Barno told Politico that the celebration “looks like it’s becoming much more of a Republican Party event—a political event about the president—than a national celebration of the Fourth of July.”

The same day the donation was announced, Trump also announced an indefinite delay of the May 2019 tariffs – including for fireworks. 

“This is another example of how private companies attempt to use their money to influence the government by stroking the president’s ego,” said Jordan Libowitz with Citizens for Responsibility and Ethics in Washington, a nonpartisan watchdog group. The tariffs eventually went into effect a month later. 

Trump’s use of delays and temporary tariff exceptions keeps him in a beneficial position where corporations and lobbyists are incentivized to continually stay in his good graces to continue receiving the tariff benefit.

The Trump Administration’s tariff relief program meant to support farmers 

When Trump imposed tariffs on China in his first term, China reacted accordingly with counter-tariffs that eventually caused nearly $26 billion in agricultural export losses from 2018 through 2019. To “help,” the Trump administration initiated a bailout program for farmers hurt by his trade war. 

“It’s clear that the Trump administration’s trade assistance payments pick winners and losers rather than help the farmers who have been hit the hardest by this president’s trade policies.” -Rep. Debbie Stabenow (D-Mich.)

Even Sen. Rubio (now Trump’s Secretary of State) joined in with Sen. Menendez and Rep. DeLauro in expressing concern over $67 million in bailout funds going to JBS, a Brazilian-owned meat-processing company known for a “its track record of corruption, human rights abuses, monopolization of the meatpacking market, as well as environmental risks,” according to a bipartisan group of U.S. Senators.

The Government Accountability Office was directed to investigate the program, and in 2020 released a report detailing how the bailouts created deep regional inequities, funneled money to large agricultural operations over the hard-hit smaller farms, and favored certain crops over others.

• Eight of the top nine states with highest payments per acre were in the South – and Trump carried all nine in the 2016 election (Georgia, Mississippi, Alabama, Arizona, Arkansas, Tennessee, Louisiana, Florida, Texas). Southern farmers received higher payments compared to any other region, with Georgia averaging $42,545 per farmer – more than double the national average payment of $16,507. Payments for cotton in particular, a crop primarily grown in the South, were 33 times more than the estimated trade damage.

• When the USDA doubled the payment limit farmers could receive from $125,000 to $250,000 in 2019, an additional $519 million was funneled to about 10,000 of the largest farms – the top 1.3% of recipients – protecting the mega and multinational and doing nothing to provide targeted assistance to the small and beginning farms that truly support the middle class.

Trump’s first-term USDA Secretary, Sonny Perdue, shamelessly said, “In America, the big get bigger and the small go out.” One of Trump’s first actions in office in 2017 was to withdraw rules that protected farmers from monopolistic, vampiric agribusinesses. Between September 2018 and September 2019, farm bankruptcy filings rose 24% nationally.

The absolute bungling of the tariff relief program meant to support farmers, the backbone of the United States, likely contributed to further corporate consolidation and the erosion of economic independence. Trump’s second-term USDA Secretary, Brooke Rollins, said during her Senate Agriculture Committee nomination hearing that she has spoken with Perdue about how the agency managed the trade war. “We are prepared to execute something similar, if approved, if confirmed.” Rollins was confirmed as Secretary on February 13, 2025.

Looking to 2025 and Beyond

We are already seeing indications that Trump’s second term will see the same types of corruption and self-dealing dictating trade and supply-chain policymaking. 

The introduction of the world’s richest man and “First Buddy” Elon Musk to Trump’s inner circle only raises more concerns for cronyism.

Since Musk is a “special government employee,” a role created by Congress in the 60’s that permits the federal government to bring on individuals for temporary, specific roles, he does not have to divest from his businesses – even if he’s supposed to recuse himself to follow conflict-of-interest laws. Trump’s dismantling of ethics rules is “opening the floodgates for conflicts of interest and exploiting his power in office in the hopes of making billions of dollars on the backs of taxpayers,” according to Public Citizen co-president and government integrity expert Lisa Gilbert.

Prior to Trump’s 2025 inauguration, Musk encouraged members of Congress to reject the government funding bill over a provision that could have impacted his electric vehicle manufacturing operations in China. 

The bipartisan provision was intended to regulate U.S. investments in specific Chinese strategic technologies. While Trump rails against China’s manufacturing firepower, Musk sought to upend government funding to protect his profits “at the expense of American workers, innovators, and businesses,” House Appropriations ranking member Rosa DeLauro wrote. The provision was ultimately removed from the funding legislation, and the pared down bill passed on December 21, 2024.

Further, Musk’s EV manufacturing company, Tesla Inc., is ‘spearheading the fight’ against new tariffs on graphite imports from China. Graphite is the largest component by volume in an EV’s lithium-ion batteries, and China produces more graphite than any other country. As of mid-February 2025, it is subject to a 25% tariff. U.S. graphite producers argue that Chinese producers keep their prices artificially low, and at the American Active Anode Material Producer’s urging, the ITC voted for Commerce to proceed with investigations that could lead to tariffs on Chinese graphite as high as 920%. Tesla executives, incentivized by Biden’s Inflation Reduction Act tax credits, claim to be in the process of moving their supply chain to the U.S. “Additional duties would not speed up that process,” said Dinesh Swamynathan, the company’s senior director for battery cell supply chains.

The outcome of these graphite tariffs will be a clear test for Musk’s influence over Trump and his tariff so-called ‘strategy.’ 

“It’s an obvious conflict…. This is the problem, we don’t know whether he’s in the government or out of it.” -Richard Painter, University of Minnesota professor of corporate law and ethics lawyer for the G.W. Bush Whitehouse 

Teslas sold in the U.S. are, in large part, made in the U.S. So if and when tariffs related to the EV supply chain do go into effect, Tesla is expected to come out ahead, as its rivals tend to have more complex global supply chains and will therefore be more affected. “Conflict of interest is putting it very mildly here,” said John Helveston, an assistant professor at George Washington University who teaches engineering management. Even potential tariffs on China, where Tesla is heavily invested, may not be especially detrimental for Musk, as Tesla’s supply chain in China is also largely self-sufficient.  

Musk’s powerful and ill-defined role in the U.S. government is already leading other countries to act in Musk’s interest. 

For example, in early March 2025, the U.S. State Department and Vietnam’s Foreign Ministry had a call in which Sec. Rubio “encouraged Vietnam to address trade imbalances.” Shortly thereafter, the Vietnamese government laid out a battery of appeasements to the Trump administration. The strategy highlights recent plans to adopt a rules change that would give Musk something he has wanted for over a year: a cleared path for Starlink, Musk’s satellite internet company, into the country. This rule change, according to an unnamed source speaking with Reuters, can be seen as “an olive branch” to Musk and his company. It’s a “demonstration from the Vietnamese side that they can play the transactional diplomacy game if the Trump administration wants that,” the source said. 

It’s easy to see how other countries might decide that actions to benefit Musk’s companies could win them favor with the Trump administration. This has been dubbed “Starlink diplomacy” – a change in policy to open a country to Musk’s satellites in an apparent attempt to win favor with the Trump administration. Analysts have questioned if decisions around Starlink permits in Canada, Bangladesh, and India are politically motivated.

Conclusion

When used strategically, tariffs are an important tool for protecting American jobs and industries from unfair competition. But tariffs alone do not build new production capacity or ensure Americans have reliable access to goods – revitalizing U.S. manufacturing and creating good-paying jobs requires combining tariffs with tax, investment, procurement and other industrial policy tools.

When used recklessly, tariffs present a golden opportunity to rip off taxpayers to benefit the billionaire class. 

Federal agencies were overrun by the sloppy process in the first term. Trump’s decimation of federal government staff in his second term will only create more chaos – and room for corruption.

Despite Trump’s promises of “No exemptions, no exceptions!,” several have already been granted, and White House Press Secretary Karoline Leavitt reported Trump is “open” to requests from industries seeking exemptions, suggesting more may be on the way. His second term could easily be a repeat of his first – rife with individual billionaires or favored companies appealing to Trump for specific tariffs or exceptions in return for other favors – doing more harm than good.