Trump Puts New Bull’s-eye on Business

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Trump Puts New Bull’s-eye on Business


Category: Business News

President-elect Donald Trump is finding a novel way to push his populist economic agenda: take on American businesses directly.

Previous presidents exerted a light touch with businesses, tackling industries as a whole while discussing policy in overarching tones. Trump, who built his name and brand in business, has shown a repeated interest in diving into specific brawls with particular companies, to the point that a company in his sights could see a tweet swing its stock price.

The highest-profile exchange thus far was with the heating-and-cooling manufacturer Carrier, which earlier this year announced plans to close an Indiana plant and move jobs to Mexico.

Trump talked about the company for weeks, eventually convincing it to keep its Indianapolis plant open through a combination of state tax incentives and presidential arm-twisting.

He then declared victory, holding a rally at the Carrier plant that started the fuss.

On Tuesday, Trump openly attacked the airplane manufacturer Boeing, saying he wanted to cancel a contract for the company to build a new Air Force One.

“Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!” tweeted Trump, seemingly unprompted, on Tuesday morning.

“I think Boeing is doing a little bit of a number,” he told reporters minutes later from Trump Tower. “We want Boeing to make a lot of money, but not that much money.”

The tweet and comments in front of Trump Tower’s elevators were vintage Trump.

They fired up a news cycle, giving television’s talking heads a subject that Trump wanted them to talk about.

Boeing initially saw its stock dip following Trump’s tweet and released a statement saying it only had a contract for $170 million — not the $4 billion mentioned by the president-elect.

Trump’s approach is a marked shift from prior presidents, who usually dealt with the private sector on an industry level and in the broadest terms. And they almost never targeted a specific company for public scorn and criticism.

Trump has singled out a host of companies, including Ford, Apple and Amazon.

Most often, the attention is aimed at criticizing a business for taking a stance Trump views as bad for the American public.

Shortly after striking a deal with Carrier, Trump chastised industrial manufacturer Rexnord for “rather viciously firing” workers in Indiana and shipping them to Mexico.

Trump is also willing to embrace a particular business to tout a political success.

On the same day he chastised Boeing, he appeared alongside the head of Japan’s SoftBank Group as the telecommunications company announced plans to invest $50 billion in the U.S.

All this puts small-government conservatives in an uncomfortable position.

They are used to Republicans giving the private sector nearly free rein, and the right has often criticized Democrats, including President Obama, for picking winners and losers in business.

“It’s not a positive impression. There are so many things that are off about this kind of approach,” said K. William Watson, a trade policy analyst for the Cato Institute. “It makes for a big spectacle, but even if you wanted Trump to achieve his goals, this is not a very effective way to do it.”

Elected Republicans, including those wary of Trump’s vows to impose harsh tariffs and other protectionist policies, are hoping Trump’s business-by-business approach is the opening step of a broader policy goal.

“I think he’s using these examples to make a point,” said Sen. Pat Toomey (R-Pa.). “The president-elect understands that we’re not going to be able to keep good jobs in America 1,000 jobs at a time and with individual companies. He knows that. It’s about creating an environment where companies want to stay.”

The business community is looking to strike an optimistic tone about the unpredictable Trump.

While some disagree with Trump’s approach and policies, many business groups and corporations believe having Republicans in charge of the White House and Congress could be good for their bottom lines.

They also hope that the GOP-led Congress can constrain Trump at times.

Trump, for example, has threatened to impose a 35 percent tariff on foreign goods, something rejected on Monday by House Majority Leader Kevin McCarthy (R-Calif.).

“If we get the underlying foundation right with the right tax policy, the right immigration policy, the right regulatory policy, we’re just flat-out going to be a lot more competitive, and you’ll see a lot less need for this because there are some significant advantages to being here in the largest, most important market in the world,” John Engler, president of Business Roundtable, told reporters on Tuesday.

Doug Oberhelman, chairman and CEO of Caterpillar and chairman of Roundtable, said that as a major U.S. exporter — 80 percent of jobs at their Midwest plants rely on exports — a 35 percent tax on goods coming from Brazil or China could pose serious problems for their global business.

“A 35 percent tariff on incoming goods sounds good until you realize that our biggest markets, Brazil, China, India and elsewhere that we export to, the retaliation from that could be a 35 percent tariff on our goods being exported,” Oberhelman said.

“I think a better way is a positive engagement between the administration, business and those foreign countries to figure out how we all win on trade.”

Source: The Hill