Not content to steer the ship of state, our president apparently wants to run the ship of commerce, too.
Literally. The entire Fortune 500.
In ripping up numerous business regulations, Donald Trump seems intent on replacing them with himself. The recipient corporations don’t necessarily want Mr. Trump’s meddling, particularly given his fun house view of economics, but they can’t get away from it. They won’t necessarily benefit, and neither will we.
It’s been a busy few months. Among other actions, Mr. Trump has reportedly forced Nvidia to pay a 15 percent tax on A.I. chips it sells to China and at one point demanded the resignation of Lip-Bu Tan, C.E.O. of rival chipmaker Intel, for his past ties to Chinese firms. Our president has compelled the companies involved in a major steel acquisition to reportedly give the U.S. government the authority to name a member on the board of the combined company. He hinted that Goldman Sachs should fire its chief economist, apparently for having the temerity to predict that the president’s tariffs would eventually fuel inflation, a prediction seconded by many economists in America (who are not working for Mr. Trump). He’s even found time to demand that Coca-Cola produce its signature soda with cane sugar instead of the high-fructose corn syrup the company has used for decades.
Unfortunately, Mr. Trump’s view of the world doesn’t always line up with economic realities. He pressures energy companies to drill, drill, drill, even if energy prices suggest they shouldn’t be expanding production. He loosens environmental regulations — after companies have already spent billions to meet them. Then there’s his distorted aversion to clean energy even as energy demand for industries such as artificial intelligence increases and the deep-red state of Texas leads the nation in wind and solar energy production.
The Great Dealmaker wants in on the deals. After initially opposing a proposed merger of Nippon Steel and U.S. Steel, Mr. Trump reversed himself and said he’d allow the deal to go through — provided, according to reports, his administration won a type of “golden share” of company. This golden share would explicitly give the president a personal say in the combined company’s major decisions going forward.
The same applies to the bigger issue of bringing back manufacturing. If you believe the Fed’s data, manufacturing as a component of our economy has remained relatively steady since 1947. Moving assets around the world is slow and expensive, especially when many Americans prove by their buying habits that they won’t necessarily fork over more for Ford F-150s or iPhones made here. Nor do they even seem to want the manufacturing jobs Mr. Trump is so eager to create.
Mr. Trump demanded that Walmart “eat” the proposed 30 percent tariff of goods from China — even though Americans seem quite happy buying low-priced goods from China. And there’s been no outcry from consumers about the sweetener in their Coke. The New Coke fiasco of 1985, when the public rejected a reformulated version of Coke, showed that soda drinkers are quite capable of making their preferences known without the government’s help.
Companies realize that consumers will hold them accountable for their actions even if the government doesn’t. So whether or not Mr. Trump and his E.P.A. are interested in protecting the environment, it’s in their corporate interest to do so.
In the case of climate change, insurance companies have made clear in their underwriting that they believe what scientists are telling them about rising sea levels and extreme weather — which is why rates have gone up on hurricane insurance policies in Florida for residents who can actually find one. As for electric vehicles, Mr. Trump’s animus toward clean tech, and his use of government policy to thwart sales, won’t prevent that technology from eventually replacing internal combustion engines. He will, though, make the changeover more costly, for automakers and auto buyers.
Mr. Trump’s record — he’s captained six enterprises onto the shoals of bankruptcy — is hardly an endorsement of his business acumen. Yet for America’s business leaders, there’s no avoiding the Oval Office. Mr. Trump and his sometime antagonist Jamie Dimon, the C.E.O. of JPMorgan Chase, have apparently patched up their differences. The Ford Motor executive chairman, Bill Ford, can’t be thrilled about having Mr. Trump politicize his family firm’s business, even if Ford is saying all the right things about building in America. Henry Ford envisioned the company as global from the start — and Ford has been building in Mexico since the 1920s.
Mr. Trump’s attempt to insert himself into the corner office in every corner of corporate America has been described as state capitalism, an economy marked by the government guiding the decisions of private industries. That model is more Chinese or European than American and the opposite of what the Republican Party has stood for traditionally. The party of business is supposed to stay out of the way of business and let the wisdom of the market decide the winners and losers, as conservatives’ favorite economist, F.A. Hayek, commanded.
When governments nationalize a struggling business, the results typically aren’t pretty. Amtrak, anyone?
The histories of the computer industry, the internet and clean energy do offer ample testimony to the vital role the government can and should play in business development. Mr. Trump’s insistence on trying to direct these businesses himself, on the other hand, is bad for corporations, consumers and capitalism. Please just run the executive branch, Mr. President, and let real executives run the businesses of America.
Bill Saporito is a business journalist and a former editor at Fortune.
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