Donald Trump's aggressive and wildly unpredictable use of tariffs is spooking American business groups, which have long form a potent force in his Republican Party.
Last week, Corporate America was blindsided when President Trump threatened to impose a crippling taxes on Mexican imports in an attempt to stop the movement of Central American migrants into the United States.
On Friday, both country came to an agreement after Mexico agreed to do more to stop the migrants. But by Monday, Donald Trump was again threatening the tariffs if Mexico failed to abide by an unspecified commitment, which is to "be revealed in the nearest future."
Such whipsawing is now a hallmark of Trump's trade policy. The president repeatedly threatens tariffs, sometimes imposes them, sometimes suspends them and sometimes threatens them again and at other times, he drops them.
Business groups are already uncomfortable with Trump's attempts to stem immigration and are finding it hard to figure out where to stand in the fast-shifting political climate. They have happily supported Trump's corporate tax cuts and moves taken to loosen environmental and other regulations. But Trump's use of tariffs has proved alarming to Business groups.
"Business is dying out," said Rick Tyler, a Republican strategist and frequent Trump critic. "He calls himself 'Mr. Tariff man.' He's proud of it... It's bad news for the party. It's bad news for the free market."
"It was a good wakeup call for business," James Jones, chairman of Monarch Global Strategies and a former U.S. ambassador to Mexico, said of Trump's abrupt move to threaten to tax Mexican goods.
The Chamber of Commerce is in the early phases of disentangling itself from the Republican Party after decades of loyalty. The Chamber, which spent at least $29 million largely to help Republicans in the 2016 election, earlier this year announced that it would devote more time and attention to Democrats on Capitol Hill while raising the possibility of supporting Democrats in 2020.
Relatively few expect the Chamber or business-backed groups like the Koch network to suddenly embrace Democrats in a significant way. Nevertheless, even a subtle shift to withhold support from vulnerable Republican candidates could still make a difference in 2020.
Trump's boundless enthusiasm for tariffs has upended decades of Republican trade policy that favoured free trade. It has however left the party's traditional allies in the business world struggling to maintain a balance political relevance in the Trump era.
Trump's tariffs are taxes paid by American importers and are typically passed along to their customers. The tarrifs can provoke retaliatory tariffs on U.S. exports. And they can paralyze businesses, uncertain about where they should buy supplies or situate factories.
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