President Donald Trump’s on-again, off-again relationship with corporate America was on full display this week as he sparred publicly with the country’s most powerful business lobby over his rinse-and-repeat use of tariffs – and then welcomed top executives to the White House to plead with him in person.
JPMorgan Chase CEO Jamie Dimon met with White House officials to discuss trade issues on Friday, a White House spokesman confirmed to CNN, part of a broader meeting with the Business Roundtable, which includes top executives from some of the biggest companies in the country, including Apple and Amazon. Apple CEO Tim Cook was at the White House the day before.
But despite powerful chief executives airing concerns — both privately and publicly – the President has shown no willingness to heed their advice, leaving them watching from the sidelines as he engages in trade spats with China and traditional US allies like Mexico, Japan and the European Union.
It hasn’t come at a price, so far, as the economy rolls into its longest economic expansion. But increasingly, it’s Trump’s multi-front trade war that poses the greatest risk to the global economy.
“Unless Trump sees real economic harm – a slowing economy, job losses, sustained falls in the market – he is unlikely to react,” said Edward Alden, a senior fellow at the Council on Foreign Relations, who specializes in trade policy. “He seems to believe quite firmly that his tariffs are helping the economy, and it is going to take more than a few complaints from CEOs to knock him from that conviction.”
Trump has ignored warnings from hundreds of chief executives around the country that tariffs will result in economic calamity with prices on everyday consumer goods increasing and the potential for job losses. On Thursday, more than 600 companies and industry trade associations – including Walmart, Costco, Target and Foot Locker – wrote a joint letter to the White House urging Trump to lift tariffs on China, warning an “escalated trade war is not in the country’s best interest, and both sides will lose.”
But the President, whose tariff-first approach provoked his top economic adviser Gary Cohn to quit more than a year ago, has repeatedly brushed off concerns by American corporate leaders. And he’s felt free to personally attack them, publicly going after GM CEO Mary Barra last year for her decision to shut down an Ohio plant.
On Monday, Trump spontaneously called in to a CNBC to attack a top US Chamber of Commerce official for criticizing his administration’s broadening tariff strategy. He threatened to rescind his membership to the organization, suggesting the business network with its three million members has tried to “take advantage” of the country “in every way possible.”
“I’m a member of the US Chamber – maybe I’ll have to rethink that, because you look at it, the Chamber is probably more for the companies and the people that are members than they are for our country,” Trump argued.
Yet he’s not prepared to turn his back on business entirely.
In February, Trump launched a new board with prominent American executives to advise the administration on job training programs, more than a year after his equivocation on white supremacy triggered the dissolution of the White House’s business councils.
The new council marked a return for American corporations to a formal advisory role after executives fled earlier councils following fatal clashes between white supremacists and counter-protesters in Charlottesville, Virginia, in August 2017. The CEOs of Merck, Under Armour, Intel, 3M and Campbell Soup walked away from their White House affiliations after Trump delivered controversial remarks in which he equivocated between the groups, saying there “very fine people on both sides.”
“President Trump ignores the business community at his own peril,” said Douglas Holtz-Eakin, president of the American Action Forum and former chief economist for President George W. Bush’s Council of Economic Advisers. “His re-election will hinge on the economy, and the robust growth seen in 2018 has already suffered from the headwinds created by tariffs and trade uncertainty.”
Top executives said this week that they have openly and directly voiced their concerns to the White House and other administration officials. They’ve also called into question why the President would jeopardize congressional approval of a renegotiated trade pact with Canada and Mexico, a top legislative priority for the White House, to resolve an unrelated trade issue on border security.
“It’s not ‘never for tariffs,’” said Tom Linebarger, chief executive of Cummins, a maker of diesel and alternative fuel engines and generators, told reporters Wednesday at a briefing held by the Business Roundtable. “But it’s not the solution for everything. That is clearly an area of disagreement between the administration and the Business Roundtable. It doesn’t mean though that they are never appropriate. Just not as often as I think the administration thinks they are. We’ve been open about that. They’ve listened and I think taken our input, but don’t agree.”
Despite their public frustrations with the Trump administration’s policies and increased volatility, business leaders say their access to White House officials and key members of the President’s cabinet, especially Robert Lighthizer, the country’s top trade negotiator.
In March, the Business Roundtable hosted Trump, his daughter and adviser Ivanka Trump, Treasury Secretary Steven Mnuchin, National Economic Council director Larry Kudlow, and Lighthizer, the US Trade Representative at their quarterly meeting in Washington. Vice President Mike Pence and other Cabinet officials have also met with the lobbying firm more recently.
Still, Trump has shown no signs of relenting on his tariff strategy, repeatedly defending the maneuver in public as effective leverage in his dealings with both Mexico and China.
“You would never have had that deal if I didn’t impose the tariffs and those tariffs were ready to go on Monday,” Trump said on Wednesday during a press conference in the Rose Garden with Polish President Andrzej Duda, referring to Mexico. He’s also shown no signs of backing down on China, taking credit for holding up the trade deal and refusing to set a deadline on when a third round of tariffs might kick in.
“No, I have no deadline. My deadline is what’s up here,” Trump said during the same press conference, pointing to his head. “We’ll figure out the deadline. Nobody can quite figure it out.”
It’s that uncertainty and unpredictably that worries top CEOs the most as their fears grow of a possible downturn.
“They are going to do what they’re going to do,” Dimon told reporters this week before his White House meeting. “It’s not up to us. We will tell them what we think at a very detailed level and hope they do the right thing.”