This content was originally published by ProPublica, a Pulitzer Prize-winning exploratory office.
After President Donald Trump announced sweeping new levies earlier this month, the White House released a list of more than a thousand items that would be exempted.
One product that made the list is polypropylene terephthalate, more commonly known as PET epoxy, the plastic used to produce plastic containers.
Why it was spared is questionable, and also persons in the industry are confused about the reason for the break.
But its inclusion is a win for Reyes Holdings, a Coca-Cola bottler that ranks among the largest privately held organizations in the US and is owned by a pair of sons who have donated millions of dollars to Democratic factors. Records show the business just hired a lobbying organization with close relationships to the Trump White House to make its situation on taxes.
Whether the business ’s lobbying played any role in the deduction is unclear. Torres Holdings and its lobbying did not respond to queries from ProPublica. The White House even did not comment, but some business activists say the administration has rebuffed calls for deductions.
The resin’s unexpected addition on the list exemplifies how transparent the administration ’s method for crafting its tax legislation has been. Key participants are in the black about why certain items face charges and others don’t. Tax charges have been altered without any apparent reason for the alterations. Administration officials have given conflicting information about the taxes or declined to answer queries at all.
The lack of clarity about the procedure has created problems among business professionals that politically connected firms may be winning carve-outs behind closed doors.
“It had been corruption, but it could just as easily become incompetence, ” a lawyer who works on tax legislation said of PET resin’s addition. “To be fair, this was like a hurried chaos, I am not certain who got into the White House to talk to people about the record. ”
During the first Trump presidency, there was a proper method for seeking an exemption from taxes. Businesses submitted hundreds of thousands of uses making the case for why their products should be spared. The programs were open, so the technology of the tax crafting method could be more closely examined. For clarity allowed academics to immediately assess thousands of the applications and decide that political donors to Republicans were more likely to be granted exemptions.
In Trump’s next name, at least so far, there has not been a formal application process for tax carve-outs. Industry executives and activists are making their circumstance behind closed doors. The Wall Street Journal ’s editorial board last month called “the transparency of the process ” for getting an exemption “the Beltway Swamp’s vision. ”
In the professional order formalizing Trump’s fresh tariffs, including baseline 10 % tariffs for almost all countries, exemptions were loosely defined as items in the medical, semiconductor, lumber, copper, essential vitamins and energy fields. An accompanying list detailed the specific products that would be spared.
But a ProPublica review of that list found many items that don’t fit neatly, or at all, in those broad categories– and some items that fall squarely within the categories were not spared.
The White House exclusions list, for example, included most types of asbestos, which is not generally considered a critical mineral and does n’t seem to fit in any of the exempted categories. The cancer-causing mineral, which is not generally considered critical to national security or the US economy, is still used to make chlorine, but the Biden administration ’s Environmental Protection Agency banned imports of the material last year. The Trump administration has signaled it may roll back some of those Biden-era restrictions.
A spokesperson for the American Chemistry Council, which had pushed back on the ban because it could hurt the chlorine industry, said the trade group played no role in lobbying for asbestos to get a tariff exemption and did n’t know why it was included. ( Two major chlorine companies also showed no indication of lobbying on the tariffs in their disclosure forms. )
Other items that landed on the list, despite not falling into exempted categories, are far more innocuous. Among them: coral, shells and cuttlebone, a part of the cuttlefish that is used as a dietary supplement for pets.
PET resin also does n’t fit neatly in any of the exempted categories. It’s possible the administration counted it as an energy product, experts said, because its ingredients are derived from petroleum. But other products that would have met that same low bar were not included.
“We are as surprised as anybody, ” said Ralph Vasami, executive director of the PET Resin Association, a trade group for the industry. The resin, he said, has no application for the exempted categories, unless you count the packaging those products come in.
During the fourth quarter of last year, the same period when Trump won the election, records show Reyes Holdings, the Coca-Cola bottler, enlisted Ballard Partners to lobby on tariffs. During the first quarter of this year, when Trump was inaugurated, records show that Ballard began lobbying the Commerce Department, which shapes trade policy, on tariffs. The firm has become a destination for companies looking for an in with the Trump administration. It once lobbied for Trump’s own company, the Trump Organization, and its staff has included top officials in the administration, such as Attorney General Pam Bondi and the president ’s chief of staff, Susie Wiles. Brian Ballard, its founder and a prolific fundraiser for Trump, was named by Politico “the most powerful lobbyist in Trump’s Washington. ” He was one of two lobbyists from the firm who lobbied on tariffs for Reyes Holdings, federal disclosure records show.
The billionaire brothers behind Reyes Holdings, Chris and Jude Reyes, also have their own political ties. While they have given to some Democratic candidates, the bulk of their political donations have gone to Republican causes, campaign finance disclosures show. And after Trump’s first election win, Chris Reyes was invited to Mar-a-Lago to meet privately with Trump.
The PET resin carve-out is n’t just a break for Reyes Holdings. It’s a boon to other firms that buy the resin to manufacture bottles and the beverage companies that use them. Earlier this year, the CEO of Coca-Cola said the company would transition to using more plastic bottles in the face of new tariffs on aluminum, a plan that might have been dashed if the thermoplastics were also hit with new tariffs.
Disclosure records show the company also lobbied this year about tariffs on the Hill, but the documents don’t provide detail about which policies in particular, and the company did not respond to questions from ProPublica. ( Coca-Cola has looked to make inroads with Trump, donating about$ 250,000 for his inauguration, and the CEO presented Trump with a personalized bottle of his favorite soda, Diet Coke. )
Another industry that appears to have done relatively well lobbying for carve-outs from the recent tariffs is agriculture. The exemption list includes various pesticide and fertilizer ingredients.
The American Farm Bureau Federation, an agricultural lobby, took credit for some of those exemptions in an analysis posted on its website recently, calling exemptions for peat and potash “hard fought for by agricultural organizations such as the American Farm Bureau Federation ” and “a testament to the effectiveness of farmers’ and ranchers raising their collective voice. ”
There are a number of other imports that don’t neatly fall into any of the exempted categories but might if the categories were defined loosely.
One example is sucralose, the artificial sweetener. Its inclusion will largely help companies that use the product in food and beverages. But sucralose is also sometimes used in drugs to make them more palatable. It’s not clear if the White House gave it a pass under the pharmaceutical exemption or for some other reason.
Even for the items that were spared, the reprieve may just be temporary.
The broad categories exempted are largely industries that are being investigated by the administration for potential future tariffs under its authority to administer levies to protect national security.
Alex Mierjeski and Agnel Philip contributed research. Sign up for The Big Story newsletter to receive stories like this one in your inbox.