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Why Corporate America Cheers On Donald Trump Despite His Threats

Donald Trump, Masayoshi SonDonald Trump, Masayoshi Son
In this Dec. 6, 2016, file photo, President-elect Donald Trump, left, accompanied by SoftBank CEO Masayoshi Son, speaks to members of the media at Trump Tower in New York. Photograph by Andrew Harnik—AP

President-elect Donald Trump has lost no chance to bash or threaten individual companies that cross him.

Yet much of corporate America appears to view Trump not as an adversary but as a powerful friend. For all his bullying stance toward some companies, businesses have been cheered by his vows to slash taxes and soften Obama-era rules that were designed to protect workers, the environment and the financial system and by his choices to lead the Labor Department and Environmental Protection Agency.

The prospect of a stronger economy and richer profits is appealing enough that most businesses—and stock investors—are downplaying the uncertainties that followed Trump’s presidential victory last month. The Dow Jones industrial average has rocketed 8% to a record high since Election Day on expectations of faster economic growth.

Many manufacturers, which have been reeling for years from shrinking demand for their goods, say they view Trump as more sympathetic to their interests than President Barack Obama was.

“When he uses the phone, he does it to tell manufacturers that he supports them and wants them to create jobs in the United States,” said Jay Timmons, president of the National Association of Manufacturers. “That is a far cry from what we hear in the current administration.”

The Obama administration helped bail out General Motors (GM) and Chrysler and halted a freefall in factory layoffs. But it also issued a series of environmental and labor rules that were designed to limit damage from climate change and raise pay for workers. Business-backed groups argue that such regulations have instead raised costs and depressed hiring.

The manufacturers association hosted Vice President-elect Mike Pence on Thursday and met with members of the Trump transition team on Friday. And though Trump has threatened slap a 35% tariff on companies that shift factory jobs abroad and then bring goods back to the United States, Timmons said didn’t think that would be a priority for the president-elect.

“The first order of business is to fix the problems that have made us noncompetitive,” Timmons said after meeting with Pence.


Organizations representing small businesses, such as franchises for stores and restaurants, are also expressing optimism.

“We’re incredibly hopeful,” said Matt Haller, a spokesman for the International Franchise Association. “We went from an environment where you had certainty but no real hope to an environment where there is definitely some uncertainty but a lot of opportunity.”

A businessman himself, Trump appears to relish discussions with corporate leaders. During a speech Thursday in Des Moines, Iowa, he recounted private phone conversations he had with top executives.

“I actually love calling these companies,” Trump said.

It looks like Silicon Valley will get a face-to-face meeting with Trump later this week. The Wall Street Journal reported Saturday that many tech executives are expected to meet with Trump in New York including Tim Cook, CEO of Apple (AAPL); and Larry Page, CEO of Google parent Alphabet (GOOGL).

What’s on the agenda isn’t clear, although a major theme for Trump has been criticizing companies that have shipped jobs from the U.S. to other countries. He wants Apple to open its largest factory in the United States.

At his behest, Carrier announced it would keep 800 jobs at a plant in Indianapolis, though it would still send hundreds of jobs to Mexico. Trump used the prospect of tax reform to keep that Carrier plant open and later praised the chief executive of its parent company, United Technologies (UTX).

Last week, Trump talked up the Japanese mogul Masayoshi Son, who after meeting with the president-elect in New York, spotlighted his plan to invest $50 billion and create 50,000 jobs.

“He’s one of the great men of industry,” Trump said as he shook Son’s hand in the lobby of Trump Tower before turning his back to go back up the elevator.

But in public exchanges on Twitter, Trump has been harsh toward some companies.

When he decided that Boeing (BA) was charging taxpayers too much for the next Air Force One fleet, he sent an angry tweet last week, briefly upsetting Boeing’s stock price.

He shamed bearings maker Rexnord (RXN) for shifting Indiana factory jobs to Mexico, threatening to put retaliatory tariffs on companies that offshore jobs.

Several corporate leaders have downplayed Trump’s outbursts, suggesting that they were part of a necessary public conversation about jobs that the president-elect has simply jumpstarted. Though unemployment is a low 4.6%, the sluggish pace of economic growth and wage gains have left many Americans disgruntled and anxious.

“I hope it creates a dialogue on job creation in this country at this level that we haven’t seen in a long, long time,” Douglas Oberhelman, chief executive of Caterpillar (CAT), said in a conference call for the Business Roundtable this week.

Oherhelman added that “while some of us may share our turn in the bull’s-eye a little bit,” businesses would be pleased to have states compete for manufacturing jobs through incentives and the “very aggressive pro-job creation policy” expected from the incoming administration.

Trump would cut the federal corporate tax rate to 15% from its top marginal rate of 35%. He would also let companies bring back their foreign earnings at a discounted tax rate payable over 10 years. His team has committed to generating up to $1 trillion in infrastructure projects over a decade, spurring demand for equipment, raw materials and workers.

In a speech Friday, FedEx (FDX) CEO Fred Smith urged Trump to be more open to trade agreements like the Trans-Pacific Partnership. Trump has pledged to withdraw the United States from the 12-nation pact.