More Tariff Volatility to Come This Year, Says Treyz

Henrietta Treyz, co-founder at Veda Partners, joins for an extended discussion about Congressional priorities as leaders soon return to Congress and the outlook for tariff policy heading into the fall.

If you ever stumble into a roomful of capitalists (this sounds like the start of a joke but it’s a frequent occurrence in the life of a Bloomberg Businessweek reporter), try asking why competition is such a big deal. Then settle in for a good, long sermon. About how it spurs innovation. Increases efficiency. Provides choice. Improves quality. Disciplines prices. And, ultimately, fuels economic growth. Without competition, a capitalist system struggles to function. Powerful companies that rule the market make out just fine. It’s their customers who suffer.

A centrist group of executives and business owners is now invoking these same principles to caution against the push by Republicans in Texas and other states, urged on by President Donald Trump, to redraw congressional election maps in hopes of stopping Democrats from winning control of the House of Representatives in next year’s midterm elections. Gerrymandering not only disenfranchises voters and breeds cynicism toward the political system, they argue, but it’s also anticompetitive—which makes it bad for government in all the ways a lack of competition is bad for business: It leads to a slothful, indifferent Congress whose members don’t need to listen to the people who elected them.

“When you have highly gerrymandered districts, where one party has a clear advantage, it seems like it serves one party over the other. But our view is that, actually, it serves nobody,” says Bryan Sanchez, a real estate private equity executive in Houston and a member of the group, called the Leadership Now Project.

A Republican business owner who supports Trump’s policies of lower taxes and fewer government regulations may not think that tilting maps to help Republicans is a problem—until she has a concern about, say, rising costs caused by Trump’s tariffs and gets the brush-off from her representative in Congress, who has no fear of losing a safe, gerrymandered seat and takes orders from the White House instead of voters.

“When you’ve effectively neutered one side, then the advantaged side doesn’t have an incentive, candidly, to put its very best foot forward,” Sanchez says. In a competitive election the political parties need to recruit smart, thoughtful candidates. When a party has a lock on a district, that doesn’t matter. Any warm body will do, and “you end up with candidates or elected officials who just aren’t as strong of leaders as we would all want them to be,” he says.

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