When Donald Trump left office three years ago, huffing, puffing, and plotting to overturn the results of the 2020 presidential election, the leaders of most major American corporations were delighted with his departure. They wore his moral outrage like a badge of honor. True, they had conveniently set aside scruple about Trump’s suitability as a White House occupant, aided by the generous corporate and personal tax cuts of 2017. True, many had cowardly made the mistake. turn a blind eye to its burning of environmental standards in a huge regulatory bonfire. However, the attempts to subvert American democracy and the storming of his supporters into the Capitol on January 6, 2021, were a step too far.
With unusual unity, they too snorted and snorted. Manufacturers called the riots a “disgusting episode.” The Business Roundtable, a big business lobbying group, called on Trump to “end the chaos.” Some very prominent companies pledged not to provide financial support to the 147 Republican lawmakers who had refused to certify Trump’s defeat.
On January 15, the overwhelming victory obtained in the first round of the Republican primary contest held in Iowa strengthened his position as the party’s probable candidate. Polls suggest that he would emerge victorious in a head-to-head with President Joe Biden. Now, in case there are now murmurs of alarm about what a continuation of his chaotic presidency might mean for corporate America, this time they remain behind closed doors. Recently, Larry Summers, a former pro-Biden Treasury secretary, urged CEOs to reject Trump by pointing out that Italian markets did well in Benito Mussolini’s first years in power… until he stopped them. Go well. However, for the moment, most advisors and leaders of employers’ associations advise employers to keep their heads down. Let’s forget about the Duce. The message is: duck and cover.
There are reasons to stay hidden. To begin with, ten months before the elections, anything can happen. Health issues could force either candidate to drop out of the race (together, Biden and Trump have been on Earth for 158 years, nearly two-thirds the age of the United States itself). Trump not only has to face his and Biden’s Republican rivals, but 91 felony charges in two state courts and two federal districts.
Furthermore, betting on the high moral ground of offices located on the margins can be counterproductive. Such an attitude could backfire on those who attack Trump in public, thereby reinforcing his anti-elite appeal. While in office, he was always very quick to respond when he received an attack (his preferred weapon: TWEETS IN CAPITAL LETTERS!). With trust in big business declining in recent decades, it is now easier for populists to whip up an anti-corporate outcry. The head of a major business organization ruefully admits that if he took a public stand against Trump’s campaign proposals, “the former president would be delighted.”
In recent years, as the relationship between big business and Trump’s MAGA Republicans has deteriorated, executives have learned the hard way about the risks of sticking their heads out. A CEO public relations adviser thought a year ago that it would be relatively easy for companies to reject Trump because of his legal problems. However, along came the unofficial boycott of Bud Light beer by right-wing culture warriors, offended by a marketing campaign featuring a transsexual influencer. And then that public relations specialist realized the power of the masses to harm the bottom line. “We are walking on eggshells again,” he says; Companies are caught between workers and progressive customers who demand that companies take a stand against Trump and fear of the MAGA mob.
Then there is Biden. When pressed to express a preference, many businesspeople say they see him as a firmer hand in policymaking and geopolitics. However, they are fed up with the anti-business rhetoric of his administration (Gina Raimondo, the secretary of commerce, is an honorable exception). And that makes them more tolerant of Trump. Of the two, Biden is “certainly a bigger threat to prosperity,” says billionaire financier.
Even Biden supporters criticize the “big is bad” stance of his antitrust advocates. Those antitrust enforcers don’t bite as much as they bark; many of their cases have failed in court. However, the barking has been enough to chill the negotiation of agreements, laments an investment banker. Regarding the risk that Trump could weaponize administrative agencies and use them against his corporate enemies, Neil Bradley of the US Chamber of Commerce counters that Biden has also urged his administration to crack down on “tariffs”. “unnecessary” and abusive prices in sectors ranging from airlines to banking and healthcare. Bradley does not make many distinctions between the economic populism of both parties.
Some business owners angrily reject efforts to draw parallels between the dangers of Trump and Biden. They call this practice a simple recourse to “and you more” and quietly declare themselves terrified at the prospect of a second Trump term. In the first, the former president may have pushed radical policies, but the sensible conservatives in his administration, as well as his own predilection for chaos, managed to get the best of him. He is now surrounded by true believers, such as the Heritage Foundation, a pro-MAGA think tank whose job, one business leader says, is to “prevent the improvement of Trump’s program.”
In other words, Trump is counting on people to push a plan that could shake the economic framework in which American businesses have prospered for generations. The pillars of that plan that are of greatest immediate concern to corporate America are trade, immigration, the fiscal deficit and clean energy.
The most obvious concern is a trade war. Trump, who has branded himself a “tariff man,” has floated the idea of ??imposing a 10% benchmark levy on all imports. They would be raised, following the logic of “tit for tat,” in retaliation against any country with a higher tariff. The main objective is China. Businessmen fear that Trump’s intention is to unilaterally end trade with China, which would be a nightmare for any company exposed to that country. Such a trade policy would be much more draconian than that of the Biden administration, which has maintained Trump’s tariffs but has worked with allies such as Japan and the Netherlands to restrict the export of strategic goods such as advanced semiconductors, without cutting off the all trade with China.
Some hope that Trump’s attitude is mere rhetoric. They console themselves with the thought that it is Congress, and not the White House, that regulates trade and that it is the courts that decide trade laws. But Kent Lassman, who wrote a bold essay in support of free trade for the Heritage Foundation’s pro-Trump Project 2025 roadmap, believes the former president means business, even if it means tearing down existing U.S. trade agreements. . Trump “is not changing his speech”; His sense that everything is a deal and that the United States is a victim is stronger than ever. His top trade advisers, protectionist hawks like Robert Lighthizer and Peter Navarro, “know how to play on those beliefs,” Lassman says.
Trump’s threat to detain and deport millions of undocumented immigrants has also alarmed businesses; not only for humanitarian reasons, but also because of the chronic shortage of workers. In November, the United States had 8.8 million unfilled jobs. The number of unemployed is 6.3 million, despite the recent increase in immigrants who have crossed the southern border.
Trump’s toughest proposals would be difficult to implement. He made a similar mass deportation promise in the 2016 election campaign, but his plans were thwarted by lawsuits and other obstacles. Still, any uptick in expulsions could harm sectors such as agriculture, leisure, retail and hospitality, which depend on cheap labor, managers say. As important as maintaining strong borders is, whipping up anti-immigration fervor for political purposes also endangers legal immigration. That hurts companies’ ability to hire both skilled and unskilled workers.
Public debt is also very present on the minds of CEOs. They praised Trump’s Tax Cuts and Jobs Act, which cut corporate tax rates from 35% to 21%. However, they fear that neither Trump nor Biden have credible plans to stop the deficit from growing. The fear is that if Trump carries out his more unorthodox economic ideas, a loss of confidence could shake the Treasury market, raising borrowing costs and sending the dollar into a tailspin.
Some think that view is exaggerated. “The world has insatiable demand for US Treasuries,” says a top Wall Street trader who supports Biden. However, other corporate advisers raise the possibility that an unrestrained Trump could trigger a US version of the British bond market sell-off of 2022, when investors lost faith in the economic management of Liz Truss, a prime minister who lasted less than a lettuce. “I have parliamentary envy,” says the head of a pressure group, smiling. Unlike American leaders, he wryly observes, fiscally irresponsible Britons can be quickly removed from office.
The United States’ environmental record under Trump is another concern. It is expected that the former president, as the current one has done, will redouble his efforts in industrial policy. However, unlike Biden, whose flagship effort (the Inflation Reduction Act) has been environmentally friendly, Trump remains a climate change skeptic who will likely try to cut clean energy programs. In that case, he might face rejection from his own party. Many of the clean energy projects funded by the Inflation Reduction Act are in Republican-leaning states. Businesses are also likely to oppose a rollback of Biden’s green agenda. Bradley says that while industrial policy in general remains “most problematic,” government programs that induce behavioral change are justified when the technology is in an early stage, as is the case with clean energy.
And if Trump’s policy proposals directly related to business do not inspire confidence, his efforts to undermine faith in the judiciary, the rule of law, NATO and other alliances, including support for Ukraine, raise big questions about the role of the United States in the world. Some top executives shrug their shoulders. A few weeks ago, the head of an international asset manager met with a group of American bankers and found them “surprisingly optimistic” about the elections. They told him that the system would hold regardless of the election result, that the markets Stock markets had done well under both presidents and that the U.S. economy was in such good health that it would survive even electoral chicanery. “Maybe what they mean is that business has transcended politics in the United States,” he says. He adds. thoughtful: “Maybe they’re right.”
Or maybe not. Michael Strain of the American Business Institute, a pro-business think tank, says Trump’s populism increases the likelihood of political violence in the United States this year. That would hurt companies. The head of a global risk advisory company says uncertainty over Trump’s geopolitical agenda will grip multinationals and make it difficult for them to decide whether, for example, to allocate resources to China or perhaps even Russia. Any sense that Trump is weakening the rule of law and the sanctity of contracts and treaties would spread around the world. “Things like the rule of law are fragile concepts that disappear overnight,” says a New York financier.
His colleague, an expert on geopolitics, says that American businessmen rarely stop to consider the extent to which the country’s global influence, including the hegemony of the dollar and the defense of sea lanes, forms the basis of the prosperity of their companies. Ron Temple, chief market strategist at investment bank Lazard, says the gap between left and right has widened in the United States, amplifying policy variability and becoming too important a factor for companies ignore it. “There is almost a complacency, which is combined with a sense of being in possession of inherent rights and a presumptuous attitude,” he concludes. If anyone can shake corporate America from such dullness, it is surely Trump.
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Translation: Juan Gabriel López Guix
