SAN FRANCISCO/WASHINGTON (Reuters) – Big companies in the United States from Amazon to Toyota Motor Corp and Alcoa are working to counter the effect of the Trump administration’s trade policies and to head off new tariffs.
Companies are attempting to avoid any confrontation with US President Donald Trump but want to exert as much influence as they can to dissuade him from tearing up trade agreements or introducing tariffs on a wide swath of imports.
Amazon, the world’s largest online retailer and cloud-computing company, which could be hurt by tariffs on items sold through its website and components for its data centers, is discussing industry-wide advertising campaigns and more extensive government lobbying, a person familiar with the matter told Reuters on condition of anonymity.
Amazon declined to comment.
Toyota Motor North America, a subsidiary of Japan’s Toyota, which could suffer if Trump follows through on a plan to impose tariffs on imported vehicles and parts, flew workers to Washington for a rally this week in front of the US Capitol while the unit’s chief has met key members of Congress in recent weeks to discuss the potential impact of tariffs.
Executives from General Motors Co, which could be hurt if Trump pulls the United States out of the North American Free Trade Agreement or if he imposes auto tariffs, have also held meetings with the administration and Congress over the last year to raise its concerns about trade issues. Tariffs would lead to “a reduced presence at home and abroad,” the company said in June.
The largest US automaker is set to hire Trump’s former deputy director of the National Economic Council and adviser on international economic affairs. Everett Eissenstat, who left the White House earlier this month, will head GM’s public policy efforts, according to sources familiar with the matter. GM told Reuters it had an opening but declined to confirm the hire. Eissenstat could not be reached for comment.
Those already suffering from the Trump administration’s tariffs on steel and aluminum imports, which went into effect in June, are also pushing for relief in private.
The chief executive of Alcoa told investors on a conference call this week that the aluminum producer was in “active discussions” with the Trump administration, the Commerce Department and members of Congress about the elimination of tariffs or getting an exception for Canadian aluminum.
Alcoa said this week it will incur as much as $14 million a month in extra expenses, mainly from tariffs levied on aluminum imported from Canada, its biggest supplier.
Amazon’s cloud pain
In addition to the steel and aluminum tariffs already imposed, the Trump administration has threatened 10 percent tariffs on $200 billion of Chinese goods which would affect thousands of imported products from furniture to network routers.
Seattle-based Amazon is concerned such tariffs would hit shoppers during the crucial holiday shopping season, the person familiar with the matter said.
Amazon has identified a wide range of items, some of them high-value, the tariffs would hit and is assessing the potential impact on its business, the person said.
High among its concerns is an increase in import costs for components used in data centers or other items that would make its cloud computing division less competitive, two people familiar with the matter said. Amazon Web Services is the company’s most profitable unit.
Amazon is not alone in the technology industry with its worries. “It’s hard to think of many of our companies that don’t have some risk and exposure as a result of the tariff,” said Dean Garfield, chief executive of the Information Technology Industry Council, which counts Amazon rivals Microsoft, Google and others as members.
Lobbying administration officials and members of Congress can be costly with no guarantee of victory, but some have succeeded.
Apple won guarantees from the Trump administration that its lucrative iPhones would ship from China without being subject to tariffs, the New York Times reported last month.
(Reporting by Jeffrey Dastin and David Shepardson; Additional reporting by Nandita Bose; Editing by Chris Sanders and Bill Rigby)