Trump Admin Gave Tariff Exemptions to Companies that Donated to Republicans: Study

US firms may be looking at a specific method by which they can avoid the impact of tariffs levied on major trade partners by the Trump administration: donating to the Republican Party.

With President-elect Donald Trump set to assume office this month, many local companies are preparing themselves for the impact of the 47th president's tariff plan, in which he has promised to levy 25% tariffs on all goods sold to the US from certain countries including Canada and China, and Mexico.

Local firms often suffer from these tariffs, taking on additional production costs by paying for products from these trading partners regardless of the price tag, reported the Guardian. However, the federal government may allow certain firms to avoid paying duties imposed on such goods simply by providing firms with approval.

While many firms apply for these exceptions in order to avoid rising costs, a study conducted by professors and researchers from various institutions demonstrates that firms are more likely to get approved if they have donated to the Republican Party. In contrast, firms found to be supporting Democratic campaigns were much less likely to receive approval.

"A process that should have been 'arm's length' has been distorted by politics," said Veljko Fotak, an associate professor at the University at Buffalo who co-authored the report.

According to Jesus Salas, associate professor of finance at Lehigh University, tariff exemptions are worth enough money to provide "years of benefits" to companies that receive them.

Salas believes that Trump's appointment of Jamieson Greer as his new US trade representative is one of "many reasons to think some of this behavior is going to continue". Greer served as chief of staff to US trade representative Robert Lighthizer during Trump's first presidency.

"It's going to be the same staff, probably the same ideas, so we'd assume it's going to be the same behavior," said Salas.

"Even though we did not find an impact of donations to Trump's first inauguration on the chance of being granted an exemption," said Grace Lee, associate professor at Fordham University, and another co-author of the report, "it is possible that donations to the inaugural committee may increase the chance of being exempted from tariffs in Trump's second term."

Originally published by Latin Times.