NEW YORK – The relationship between corporate America and Donald Trump’s White House has chilled.
The regular parades of business titans into the West Wing are gone. A gathering of executives led by Blackstone CEO Stephen Schwarzman initially planned for next week fell apart amid scheduling conflicts.
Tesla CEO Elon Musk and Disney CEO Bob Iger quit as outside advisers to President Donald Trump following his rejection of the Paris climate accords. Dozens of other executives also publicly rebuked the White House over the decision, including Goldman Sachs CEO Lloyd Blankfein—a former colleague of many top administration officials—used his first-ever tweet to criticize the Paris decision, calling it a “setback for the environment and for the U.S.’s leadership position in the world.”
Chief executives and senior corporate lobbyists are also dismayed that the administration’s big Capitol Hill agenda – including repealing Obamacare and passing massive tax cuts – appears stalled. And the White House is now engaged in a very public fight with itself over how and when to raise the debt limit, a terrifying prospect for Wall Street and the rest of corporate America.
Executives also remain puzzled by regular reports of imminent shakeups in the West Wing, including the possible replacement of chief of staff Reince Priebus.
The result is at least a temporary freeze as CEOs grow skittish about public association with a leader who likes to describe himself as the most business-friendly president to ever sit in the Oval Office. This is especially true for executives at big public companies, who have to take into account how both employees and shareholders will respond to interactions with an unpopular and controversial president.
“It’s obviously harder for public-facing companies because when the president takes a controversial position on an issue, there’s pushback from clients, customers and possibly shareholders,” said Kathryn Wylde, president of the Partnership for New York City, a group that includes many top CEOs.
Wylde noted that it’s easier for executives who come out of Trump’s world of privately held companies to stay close to the president. “The potential mobilization of employees and customers through social media has made business people wary of getting involved in highly contentious political issues,” she said. “For those in private business who are not directly customer facing it’s not so much an issue.”
White House officials strongly deny there has been a cooling-off. They say the initial flurry of meetings was part of a push intended to set up lines of communication within the first 100 days. More gatherings will occur soon, they say.
“We knew there would be blowback from Paris but so far it hasn’t been that bad,” said one senior official who declined to be identified by name. “There will be plenty more of these meetings.”
In response to a request for comment on the wave of public critiques from CEOs, a White House spokesman repeated Trump’s argument that the Paris accord would slow the U.S. economy. “The President is keeping his promise by working for a new or better deal for America,” the spokesman said in a statement.
Defenders of the administration note that CEOs quitting Trump’s outside advisory panels thus far are Democrats from blue states like California.
The White House is planning a day-long summit of technology CEOs at the White House for June 19 to discuss modernizing government systems, an effort led by Trump’s son in law and top adviser Jared Kushner. But Musk has already quit as an outside adviser and Apple CEO Tim Cook and other tech titans also criticized the Paris decision.
The tech meeting is now seen as a key barometer for whether more CEOs will put distance between themselves and the White House.
One consultant who works to connect CEOs and the White House said there is more concern now among business leaders about attending White House meetings. “It’s like a Ponzi scheme – pretending you have people confirmed to get other people to confirm,” this person said. “It’s a manifestation of the fact that the air is coming out of this balloon quickly because the policy proposals haven’t been coordinated with the Hill, the expectation that anything will be done is rapidly dissipating.”
From a purely political perspective, the distancing of corporate CEOs may not be especially bad for Trump. He won as a populist railing against corporate influence, specifically singling out Goldman Sachs.
Many of his advisers, including chief strategist Steve Bannon, embrace an image of the president siding with coal miners and against big global companies like Goldman and G.E.—whose CEO Jeff Immelt also issued a direct critique of Trump’s Paris withdrawal on Twitter, though he plans to remain on Trump’s manufacturing council and has spoken favorably of the administration’s plans on taxes and regulation.
But there are several potential downsides. Alienating corporate executives and lobbyists could reduce Trump’s ability to raise money for an eventual re-election campaign and for other Republicans in the upcoming midterms. It could also make pushing through tough legislative items like corporate tax reform harder.
Changing corporate tax law always creates winners and losers and the White House will need to ensure that any industries who might take an initial hit from any final bill don’t organize to stop what could turn out to be the administration’s biggest first term initiative.
“There was that early blitz of meetings with leaders from all different industries and now that’s slowed down a bit,” said one senior Washington lobbyist who often visits the West Wing but declined to be identified by name speaking about the White House. “Some of that is natural. But they’ll have to do more of them if they want to succeed on health care and taxes, and they have to do both or they are at significant risk in the midterms.”
Trump regularly touts himself as a strongly pro-business president focused on creating jobs and speeding up economic growth. But both of those depend in part on corporate confidence in the administration’s ability to deliver on taxes and regulation changes.
And if that confidence wanes, the already slowing pace of job creation could decline even more. “If an administration wants something to happen and corporate America doesn’t believe in it, it’s pretty much dead in the water,” said Charles Geisst, a business historian at Manhattan College.
While relations might be at a low moment, executives and their lobbyists are not likely to stay away from the White House for long.
One corporate executive noted that Trump is often swayed by the last person he talks to, so remaining in the president’s good graces and keeping up access is critical. The senior lobbyist noted that this week is supposed to be focused on changing financial regulations with the House expected to pass a bill rolling back much of the Dodd-Frank law and Treasury slated to release a report on changing financial laws.
The summer will bring a focus on raising the debt limit, keeping the government open and moving forward on tax reform, all issue critical to corporate America. National Economic Council Director Gary Cohn last week promised to deliver a detailed tax plan to Congress after the August recess.