Howes: Trump wields bully pulpit against business, CEOs
President-elect Donald Trump is prepared to bully business.
His serial bashing of Ford Motor Co., and his bilateral talks to persuade Carrier Corp. to partly reverse plans to ship jobs to Mexico, are proving mere tastes of a willingness to use his new bully pulpit to try to bend business to his will — and strengthen his populist bona fides in the industrial Midwest.
“The U.S. is going to substantially reduce taxes and regulations on businesses,” Trump wrote in a Sunday morning tweet, “but any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. without retribution or consequence, is WRONG!
“There will be a tax on our soon to be strong border of 35 percent for these companies wanting to sell their product, cars, A.C. units etc., back across the border. This tax will make leaving financially difficult. Please be forewarned prior to making a very ... expensive mistake.”
Teddy Roosevelt, another New York Republican unafraid to challenge business, probably would be proud. The CEO class, those “malefactors of great wealth” denounced by another Roosevelt? Probably not so much.
Anyone whose goods, services and workforces flow across international borders effectively is on notice: demonstrate a bias to source, build and employ inside the United States for the U.S. market, or risk public browbeating by the new president and his Twitter account.
Evidently the two exceptions are many foreign-owned companies that compete with U.S. companies and import foreign-made goods into the country for sale to Americans. And, second, Trump-branded products made overseas (because the associated costs are cheaper) and sold here.
The president-elect is nakedly wielding the implied power of the office to achieve politically preferred results — not unlike President Barack Obama and his handling of Detroit and Wall Street in the aftermath of the global financial meltdown, or President Reagan in the early days of his first term, or JFK’s muscling of Big Steel.
Implicit in Trump’s argument is a simple component of artful deal-making: more expensive American labor becomes more affordable if corporate taxes decline, economic growth accelerates and the overall cost of doing business recedes.
It’s an if-come proposition for business leaders who’ve witnessed more than a few politicians make promises they never delivered. But it’s the basket of carrots the president-elect is offering business to avoid his rhetorical stick.
Short-term, as business takes the measure of the guy who’s supposed to be one of their own, it’s likely to work because money is fungible. A strengthening economy generally benefits business performance, bolsters consumer confidence and makes it easier to manage a new White House.
It scores points with Joe and Jane Lunchbucket, who’ve waited decades for a politician willing to call CEOs on their labor arbitrage that almost always works in favor of foreign workers and communities at the expense of Americans. It also bridges partisan divides and regional differences, aligning the likes of Trumpists with Sandernistas.
Trump’s marketplace meddling is unsettling, but not unprecedented. It was almost eight years ago that President Obama’s auto task force used its lender-of-last-resort position to effectively seize control of the Detroit-based auto industry.
It ousted senior executives deemed ill-equipped for the work ahead; reshaped product portfolios and brand lineups; influenced restructurings that closed plants and killed jobs; and pushed the companies into alternative-fuel vehicles the public still is not buying in meaningful numbers.
With the exception of the politically driven push for alternative-fuel vehicles, much of the prescription proved accurate — in part because Detroit’s own people did the hard work of executing it.
Don’t be surprised that business is waiting to see whether the Trump administration and the Republican-controlled Congress can make good on promises to lower taxes and reform health care, culminating in faster growth. But in Trump, business gets a contradiction.
Here’s a fellow CEO who’s met payrolls and talked with bankers, who understands how pulling the right levers can power economic growth and confidence. And there’s a blue-collar billionaire whose understanding of global capital flows demonstrates zero patience for nuanced arguments and buzz phrases like “build where you sell.”
Part of doing business is knowing which battles to pick. Why would Carrier’s owner, United Technologies Inc., risk its flow of federal contracts over a piece of its Carrier business? It wouldn’t, any more than Ford would follow its small-cars-to-Mexico decision by moving production of its compact Lincoln SUV there, too.
It did no such thing. Ford executives acknowledge their decision was “influenced” by Trump’s aggressive posture against American outsourcing and, second, the prospect of more business-friendly economic policies and their likely affect on the overall cost of business.
This being the heart of the industrial heartland, the downsides around here to such high-level interference are a distant second to the fact that Trump is prepared to stand athwart global capital flows and yell stop in the name of the American worker.
If you don’t think that pays political dividends, then you aren’t paying attention to the message Michigan and Indiana, Ohio and Pennsylvania sent loud and clear on Nov. 8.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.