Earlier this month, President Donald Trump introduced a series of extensive new tariffs, and subsequently, the White House revealed a list of over a thousand items that would be exempt. Among the exempted items was polyethylene terephthalate, or PET resin, a thermoplastic used in the production of plastic bottles.
The reasoning behind the exemption of PET resin remains unclear, leaving industry experts perplexed. However, this exclusion represents a victory for Reyes Holdings, a notable Coca-Cola bottler and one of the largest privately held U.S. companies, which is owned by brothers who have significantly contributed to Republican causes. Records indicate that Reyes Holdings recently secured a lobbying firm with strong ties to the Trump administration to advocate for their position on tariffs.
It is uncertain whether the lobbying efforts by Reyes Holdings influenced the exemption decision, as the company and its lobbyists have declined to comment. Similarly, the White House has not issued a statement, although some industry representatives claim exemption requests have generally been rejected by the administration.
The opaque nature of the tariff policy process has caused concern among stakeholders about the criteria used for exemption decisions. There have been inconsistent messages from administration officials regarding the tariffs, and rates have changed without clear explanations.
During Trump’s initial term, a formal application process allowed companies to seek tariff exemptions, with the submissions being made public. This transparency enabled academic researchers to assess the data, finding that political contributors to Republicans were more likely to receive exemptions. Currently, no formal process exists for tariff exemptions during Trump’s second term. Instead, industry leaders are advocating privately, leading to criticism about the lack of transparency.
The executive order establishing the new tariffs provides broad exemption categories, including sectors like pharmaceuticals and semiconductors. However, a ProPublica review identified numerous included products that do not clearly fit into these categories. An example is asbestos, which is not usually considered a critical mineral, yet appeared on the White House’s exemptions list, despite previous import bans by the Environmental Protection Agency under the Biden administration.
The inclusion of PET resin in the exemptions list has similarly puzzled industry participants, as it does not clearly fall into any exempted categories. Experts hypothesize it might have been classified under energy products due to its petroleum-based ingredients.
Reyes Holdings engaged Ballard Partners, a lobbying firm known for its strong connections to the Trump administration, during the time of Trump’s election and inauguration, to lobby the Commerce Department concerning tariffs. The founders of the firm and Reyes Holdings have notable ties to Republican politics and Trump, potentially influencing the PET resin exemption outcome.
Furthermore, the exemption of PET resin benefits not only Reyes Holdings but also other companies utilizing the resin to produce bottles. It became particularly beneficial for beverage companies like Coca-Cola, which planned to increase the use of plastic bottles due to aluminum tariffs.
In the agricultural sector, lobbying efforts have resulted in several ingredients for pesticides and fertilizers being listed as exempt. The American Farm Bureau Federation credits its lobbying efforts for these exemptions, showcasing the influence of collective industry advocacy.
The list also includes items not traditionally classified within exempted categories, such as sucralose, an artificial sweetener, which may assist both food and beverage manufacturers and drug producers.
Ultimately, the temporary nature of these exemptions leaves industries uncertain, as these broad sectors are still under consideration for future tariffs to safeguard national security.
