Judging a Trump Presidency on the front end
I was looking for a phrase that would sum up what we can expect from a Donald Trump presidency. In a New York Times article last week, former Finland ambassador Derek Shearer commented on the Trump transition team’s policy to not extend many of President Obama-appointed foreign ambassadors the customary few months needed for their children to complete the school year in their respective countries. The move marked an arbitrary break in diplomatic norms that will leave essential diplomatic posts in places like Germany and Britain vacant for potentially months.
“It feels like there’s an element just of spite and payback in it,” Shearer told the New York Times. “I don’t see a higher policy motive.”
But it wasn’t just that line. The entire day’s events seemed to be telling of what we can expect from a Trump presidency. On the same day this news came out, Trump also threatened Japanese carmaker Toyota with a specially applied tariff if it followed through on building a planned factory in Mexico that would ship cars into the US. Trump’s condition to the Japanese automaker: bring the factory to the US, or pay up.
In response to the threat, the company noted that it has already invested over $21 billion in the US, employing about 136,000 people in 10 different factories and 1,500 dealerships. A few days later, the company announced that it would be investing $10 billion in the US over the next five years — the same that it invested in the previous five years, but which will undoubtedly be used as a political win for Trump. No word yet on that planned Mexico plant.
It wasn’t the first time that Trump named companies by name, but it was the first time he had targeted an international company with the threats.
The Trump model makes government meddling in private businesses the Cornerstone of his policy.
The environment that Trump is creating is the diametric opposite of the Republican ideal the government should stay out of business. The Trump model, in fact, makes government meddling in private businesses the Cornerstone of his policy. There are other countries where the leaders often name companies by names threatening specific damages should they not comply to the leader’s rigid demands. In fact, this is par course in autocratic states like China, Venezuela, and Russia. It’s a political Swiss Army Knife that can bring ruin to a company should it not submit, or bring overly favorable dealings if it abides by the doctrine laid out before it.
Again, we have already seen examples of the latter. Weeks after getting elected as president, Trump declared that he had personally intervened to save 800 jobs in Indiana by offering the Carrier company one-of-a-kind tax incentives to keep its factory in the US. (Not mentioned was that nearly triple that amount of jobs in Indiana were still leaving the nation for Mexico and other countries.) Even early Trump-supporter Sarah Palin slammed the “deal” as “croney capitalism” and a “hallmark of corruption” in an op-ed. “Republicans oppose this, remember?” she wrote. “Instead, we support competition on a level playing field, remember?”
The implicit between-the-lines story here is that Trump now feels like the company personally owes him a big one. Let’s not act surprised when he pulls that trick out the bag every so often, just to showcase how much Greater America is getting thanks to Dear Leader. We can also expect him to heap praise on Ford after it stopped plans for a plant in Mexico, announcing that it would rather invest in the US in what CEO Mark Fields called “a vote of confidence for President-elect Trump.”
But even this should be taken with a huge grain of salt. AutoTrader.com analyst Michelle Krebs noted that: “Automakers are facing a situation where they have to consider the political consequences” of all their decisions, which, I will add, might be real or imagined, but have little to with traditional market forces at work. And as Kristin Dziczek, director of the industry, labor and economics group at the Michigan-based Center for Automotive Research, told the Guardian: “Pretty much everybody is dreading being the subject of a tweet. Getting hauled out into the court of public opinion with virtually no warning is not something anybody wants to get engaged with.”
It’s pretty easy for companies to get backed into a position where they feel like they have to please the President-elect when he embraces the willingness to publicly demonize a company on Twitter; shares of General Motors and Lockheed Martin have seen sudden drops after Trump went on Twitter rants about them. No one wants this to happen to their company.
Just yesterday, Trump again blew up the internet when he tweeted his unabashed support of the winter apparel company L.L. Bean, thanking Linda Bean for contributing to his campaign and for supporting him politically. “Buy L.L. Bean,” he wrote.
Federal law prohibits all employees of the Executive Branch — with the exception of the President — from endorsing specific products. In his first press conference since winning the Presidency, Trump and his attorneys outlined a plan that they say will ensure that he is completely separated from the daily business of his own Trump Organization empire. But something tells me that in lieu of that, he’ll be focusing his attention on building up — or tearing down — other people’s businesses.