While Donald Trump ran for president on the idea that he would run America like a CEO, so far it isn’t clear whether his self-proclaimed business skills have transferred from running a company to running the government. In fact, many argue that Trump has had trouble managing the world’s largest economy, despite the apparent stock market gains.
For one, other CEOs have all but abandoned the president. After Trump’s racist remarks in the aftermath of Charlottesville, the President’s council of CEOs was disbanded after the CEOs resigned in protest. Trump has also lost the successful CEOs who were once a part of his administration, including Rex Tillerson of ExxonMobil and Gary Cohn of Goldman Sachs.
Although the business tax cuts and deregulations have been net positives for business and corporations, Trump’s trade policies, including the trade war with China, as well as immigration policies have rattled them. On the whole CEOs have been wary of Trump’s aggressive leadership style. Jeffrey Sonnenfeld, who is a senior associate at Yale school of Management, says, “He stands for conflict — they don’t like conflict. They like stability and social harmony.” But so far Trump hasn’t been able to create any kind of harmony, and CEOs don’t view the constant conflict as helpful to their business interests.
Another aspect of Trump’s management style that has created a rocky relationship with CEOs is his tendency to personally attack companies and individuals. For example, Trump has routinely attacked Amazon CEO Jeff Bezos. He has also attacked Ken Frazier of Merck. As for companies, he had gone after Harley-Davidson and the NFL. Even Silicon Valley hasn’t escaped his attacks, as Trump as accused Twitter, Facebook, and Google of being biased against him and conservatives. He has even threatened to open antitrust cases against Google, Facebook, and Amazon.
As mentioned before, the one thing CEOs have appreciated about Trump is his tax cut policy. The stock market has boomed after the comprehensive business tax cuts passed in 2017. Corporations have had record stock buybacks and profits this year. And with the appointment of pro-business judges, corporate assessed penalties have dropped.
However, the stock market is increasingly volatile, and many worry that interest rates are about to be raised. And many are still wary about the outcome of the current trade wars. Kristina Hooper of Invesco has said that the second year of the Trump administration “has seen an emphasis on policies that can run counter to economic growth — primarily protectionism — and stocks have posted very different returns thus far this year.”