By Chris Matthews
December 9, 2016

Donald Trump has done a lot since the election to assuage Corporate America’s fears of his presidency. He’s named Wall Streeters, including just today Goldman Sachs’s Gary Cohn, and C-Suite bigwigs to his cabinet. And he’s softening his tone on immigration.

But not every executive in the Fortune 500 is convinced. And that group includes Fred Smith. The CEO of FedEx on Friday made a strongly worded critique of Trump and his trade policy. He said getting rid of the NAFTA—a trade agreement with Canada and Mexico that Trump has called “the single worst trade deal ever approved in this country”—would be “catastrophic for the U.S. economy.” And he argued that Trump should be very careful in managing the nation’s relationship with China.

Smith made his comments in a speech at the National Competitiveness Forum, an annual gathering of industrial CEOs and corporate executives.

Smith said NAFTA makes the U.S. $127 billion richer each year and is the basis for 14 million American jobs. Free trade is “absolutely essential to American prosperity,” He added. On China, Smith also seemed to break with Trump, though not as much. The FedEx CEO allowed that China, and Asian economies in general, have not opened their markets to trade as much as the U.S. What’s more, they are much more inclined to engage in industrial policy like subsidizing business and currency manipulation that increases the U.S. trade deficit and potentially costs American jobs. At the same time, Smith argued that a Trump policy administration’s top priority should be to “avoid a downward spiral in economic and commercial relations that would harm millions of people.”

There are two important takeaways from the speech. First, it shows that the corporate establishment is going to take a hardline on issues like NAFTA. Smith even made a vigorous defense of the much-maligned TPP agreement. And remember, Republican members of the House voted on 190 to 50 to give the President fast-track negotiating authority for that trade deal, which illustrates just how popular free trade deals remain in Trump’s party. With Democrats bereft of power in Washington, and Trump’s administration increasingly staffed by establishment figures, the President-elect could have a lonely fight on his hands if he attempts to dismantle the free-trade status quo.

But Smith’s comments on China does show that there is some wiggle room to find support for a tougher stance on trade relations with the world’s second largest economy. For years now, Corporate America has downplayed China’s and the rest of Asia’s protectionist tendencies, as long their businesses continued to benefit from the Middle Kingdom’s economic rise.

But the American public’s growing anger over what they see as raw trade deals can likely no longer be ignored by a Republican Party that is increasingly reliant on votes from the working class. Smith’s comments on China may be a signal of a growing consensus that the U.S. must insist on a change in trade relations with China. At the same time, there’s no guarantee that this strategy will lead to better economic opportunities at home. Worse still, it could very well instigate Smith’s fear of an internecine “downward spiral” in trade relations.

Smith made his case, now it’s Trump’s turn. The American public will be watching closely to see whether Trump’s outside-the-box thinking can make the American labor market great again, or whether it’s just the sort of empty populism that the establishment has feared.

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