President Donald Trump’s restrictive views on trade, which play to his political base and are likely to be debated in this year’s congressional elections, are creating a rift with some of the Republican Party’s biggest donors.
Those who help finance the Koch political network -- the most influential conservative organization outside the party -- are likely to discuss their discontent as they convene this weekend at a desert resort in California. Proposed tariffs on imported solar panels and washing machines Trump announced this week are fresh on their minds.
“It’s garbage,” said Chris Rufer, a libertarian-leaning Koch donor who owns a large tomato-processing business in California’s Central Valley. “He’s supposed to be sticking up for the whole country and not individual companies.”
Trump’s approach to trade also runs counter to the free-market views of the group’s top benefactors, billionaires Charles and David Koch.
“We believe increasing taxes on any import ultimately raises costs for consumers and hurts the economy," said Bill Riggs, a spokesman for the Koch-affiliated Freedom Partners Chamber of Commerce. "We just gave hardworking Americans a significant tax cut for all the right reasons. Let’s not make the products they buy more expensive."
Global Playing Field
The president has argued the tariffswill help level a global playing field he says is tilted against American workers.
Keeping the Kochs and their donors happy is important for the GOP in an election year. The network pledged to spend $300 million to $400 million on policy and political campaigns in 2017 and 2018, up from the roughly $250 million during the 2015-2016 campaign season. The money will be spread across groups that have a presence in more than 30 states and a voter-turnout operation that rivals the Republican Party’s.
The Kochs didn’t support Trump in the 2016 campaign, although members of their affiliated groups hold a range of views on the president and his policies.
The Koch network, which has more than 700 donors who give a minimum of $100,000 per year and many other smaller donors, has convened gatherings like the one this weekend twice annually since 2003. The group’s June meeting in Colorado attracted four governors, six senators and five House members. Vice President Mike Pence also met privately with Charles Koch before the session began.
Officials Attending
The full list of elected officials expected to attend this weekend’s gathering hasn’t been disclosed, but a person with knowledge of the list said invited speakers include Governors Matt Bevin of Kentucky and Doug Ducey of Arizona, Congresswoman Marsha Blackburn of Tennessee, and attorney generals Adam Laxalt of Nevada and Bill Schuette of Michigan, all Republicans. The person was not authorized to release the names and asked for anonymity to discuss the list.
While Trump’s moves on trade could alienate the Kochs, Republican strategist Rick Tyler doesn’t anticipate their donors will punish his party’s congressional candidates because of any rift.
"I don’t see members of the GOP caucus going along with Trump’s protectionism," he said. "The president has a wide latitude to unilaterally impact trade, so, if anything, the Kochs will need more free-traders in Congress, not less."
Immigration Debate
Donors also expressed frustration with Trump’s rhetoric in the immigration debate, although they may be heartened by a White House plan released late Thursday that calls for a path to citizenship for as many as 1.8 million undocumented immigrants brought to the U.
“They should be here, if they are law-abiding folks,” said Rufer, who gave about $1.9 million in 2015 and 2016 to Republican and libertarian candidates and committees that file with the Federal Election Commission.
That’s also the view of Charles Koch, who in December wrote an opinion piece with Apple Inc. Chief Executive Officer Tim Cook that said it was a "political, economic and moral imperative" to quickly help the young immigrants with a permanent solution so they can "plan their lives and develop their talents.”
The latest proposal would double the number of immigrants covered by current protections from deportation. As part of any deal, Trump also wants Congress to provide a $25 billion trust fund to pay for a southern border wall and other enhanced border security measures, and cut legal immigration.
Republican Races
Despite their concerns about trade and immigration, the donors gathering near Palm Springs, aren’t backing away from Republicans, who will be fighting to hold their majorities in the House and Senate this year.
Alex Cranberg, a Koch donor from Houston who is chairman of exploration and energy investment firm Aspect Holdings LLC, said he fears Republicans could lose control of Congress. He hopes voters will look beyond any disagreements they might have with Trump.
“If he were a figure skater, I would probably give him a couple style demerits, but he is who he is, and he won for how he is,” he said.
Donors are also pleased with many of the Trump administration’s initiatives, including cutting taxes and regulations.
Bob Fettig, the owner of a metal fabrication company in Wisconsin who donates at least $100,000 a year to the Koch network, gives Trump credit for getting the tax law passed, even though he said more could have been done to simplify the code. The Koch network has already committed to a “multimillion-dollar” effort this year to promote the tax law.
“I’m very pleased with the moves to decrease regulations,” Fettig said. “I think a lot is being done, in spite of the public circus.
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