Industry Frustration with TrumpSeptember 19, 2018 2:40 am
The global tariff wars that Trump started with the help of his advisors and Commerce Secretary Wilbur Ross don’t seem as if they’ll be ending anytime soon. Trump made it clear to the US public, citizens and elected leaders alike, that he valued loyalty above anything else. The problem with his management style is the lack of visibility, accountability, and opposing views, the normal discourse that usually precedes policy decisions. However, this is not the White House that we are living with.
Corporations, trade groups, and business leaders know it well. Trade group leaders such as the Alliance of Automobile Manufacturers and the Can Manufacturers Institute, have become more vocal about their frustrations that access to the president’s advisors has become prohibitive. This has many implications. For one, his policymakers can’t be doing much listening about how placing tariffs on European steel will hurt the profitability across several industries. And when the materials that go into producing goods in the US becomes more expensive, the costs get passed to the consumer. You have Secretary Ross saying beer and soups won’t be adversely affected. Campbell’s Soup immediately and openly disagreed. Bloomberg US steel is much more expensive to produce. Highly competitive, commodity-driven markets mean slimmer margins which rely heavily on stable trade policies and supply chains. Meanwhile, the Chinese do not seem they will tire from imposing retaliatory tariffs. They come to the negotiating table or they don’t. Heidi Brock, of The Aluminum Association, said that tariffs don’t do anything to address government subsidies that give Chinese producers an anti-competitive advantage over the US exports. This isn’t to say that the issues facing the current Administration with the Chinese over their trade policies are new. High-level US officials have lodged complaints with the WTO about Chinese artificially suppressing their currency and the unfair market advantage of government subsidies.
Earlier this year, Oprah said she was considering running and many quickly came forward begging not to have another TV star in the White House. Markets have been doing well, and banking leaders have not been critical of the president over the past two years. However, this all appears to be changing as we enter the fall mid-term election cycle. JPMorgan CEO, Jaime Dimon, stated today that unlike Trump, he didn’t become wealthy by inheriting his daddy’s money. He also said he was tougher and smarter. It surprised everyone to see the usually unassuming Dimon make multiples jabs at the president. But, he quickly dismissed any notion that those barbs meant he had office-seeking ambitions. CNN Mark Cuban and the former Starbucks CEO, Howard Schultz, have all weighed in. Business leaders are frustrated with the daily dysfunction of Trump’s White House, even with historically low corporate taxes and a strong economy.
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This post was written by Daniel Jones