According to a new report from Advancing American Freedom’s Plymouth Institute for Free Enterprise, tariff lobbying revenues reached $9.9 million for the second quarter of 2026, a 690 percent increase over the same quarter in 2024 and a 956 percent increase over 2016 (pre-Trump) levels. The number of registered tariff lobbying disclosures has jumped 230 percent in just two years. At least 22 contracts listed “tariffs” as their sole lobbying issue.
The surge is not surprising. When the federal government arrogates to itself the power to decide who receives carve-outs and exceptions, it transforms a free and open market into a system of cronyism and influence currying. The tariff schedule becomes a menu of favors, and the favor-seeking industry grows accordingly. Gordon Tullock famously documented this phenomenon, later named rent-seeking. Private resources that could fund payrolls, invest in equipment, or lower prices are instead diverted toward securing benefits from the government.
These lobbying contracts specifically target the administration’s tariff programs. They include at least 15 references to Section 232 tariffs, 13 to Section 301 tariffs, and 4 to the IEEPA tariffs that the Supreme Court struck down in February. In Learning Resources v. Trump (2026), the Court held 6–3 that the International Emergency Economic Powers Act does not authorize the president to impose tariffs, reaffirming Article I, Section 8 of the Constitution. The power to “lay and collect Taxes, Duties, Imposts and Excises” belongs to Congress, yet the administration has simply reached for other statutory shelves. On July 20, it announced new Section 338 tariffs on Canadian cars, alcohol, dairy, cement, and, in an almost comical fashion, hockey sticks.
During the Liberation Day IEEPA tariff regime, the economy shed roughly 5,000 jobs per month. Since those tariffs were struck down, it has added 137,000 jobs per month. AAF’s analysis attributes a monthly cost of 75,000 to 80,000 jobs to the Liberation Day tariffs. These tariffs did not “make America rich again,” as President Trump anticipated, but instead created instability in the labor market while contributing to ever-higher prices for American families.
The deeper distortion is the one defenders of free markets should care most about. Tariffs are regressive twice over. The first regression is familiar: import taxes fall hardest on families and small businesses, who pay the full duty at the register. The second is subtler and more corrosive. Large corporations can afford to advocate on K Street, while the little guy cannot. When exemptions are available to connected players with lobbyists and unavailable to those without, trade policy becomes a system of patronage, of government by the highest bidder. This is what Adam Smith himself referred to as the “wretched spirit of monopoly,” or what is now politely called regulatory capture or corporate welfare.
Defenders of the tariff program will argue that the lobbying boom is merely a transitional cost — the friction of a necessary realignment. But the friction is the program. A discretionary tariff regime cannot function any other way. The 690 percent increase in lobbying revenue is not a bug in the system Washington has built; it is an example of the incentives working exactly as expected. As James Madison warned in Federalist No. 62:
Every new regulation concerning commerce or revenue, or in any way affecting the value of the different species of property, presents a new harvest to those who watch the change, and can trace its consequences; a harvest, reared not by themselves, but by the toils and cares of the great body of their fellow-citizens.
Over the twentieth century, Congress steadily delegated portions of its constitutional tariff authority to the executive through statutes such as Section 338 (1930), Section 232 (1962), and Sections 122 and 301 (1974). Each abdication of responsibility has become a lever for executive improvisation and a profit center for the influence industry. The Supreme Court’s IEEPA ruling closed one door, but the administration, in typical fashion, walked through four others within days. Until Congress reclaims the taxing power the Framers assigned it, the carve-out economy will keep growing, because the incentive to seek favors grows with the discretion to grant them.
Free enterprise does not mean the absence of rules. It means rules that apply equally to everyone. A trade regime in which prosperity depends on proximity to power is closer to pre-industrial mercantilism than to the dynamic and meritocratic ideal that has characterized America. While big business pays K Street for carve-outs, families and small businesses pay the full tariff tax. The Framers gave the taxing power to Congress precisely so that prosperity would never depend on proximity to power; it is past time Congress took it back.
