Following the disbanding this week of two Presidential business advisory committees, Ben Cooper looks at Donald Trump’s relationship with business and suggests these events cannot be viewed as a standard contretemps between an interest group and the White House. A serious rift has developed and, on past record, the President will not be the one extending the olive branch.

When Donald Trump was elected, his popular support notwithstanding, misgivings abounded in every corner of the US establishment, including corporate America.

Quite apart from his politics, US corporations – along with many civil servants, judges, generals, media executives, and of course politicians – will have been uneasy about a non-politician, someone who didn’t know or didn’t care how the game was played, becoming the most powerful politician in the world. One by one, those constituencies have, to varying degrees, seen their fears realised. 

This week, it was the turn of business. The catalyst was not a business issue but the President’s reaction to events in Charlottesville.

Following the resignation of a number of prominent CEOs, two Presidential advisory committees – the Strategic and Policy Forum and the Manufacturing Jobs Initiative – were disbanded, while plans for an infrastructure council, only announced last month, were scrapped.

The food industry was represented on both the Strategic and Policy Forum and the Manufacturing Jobs Initiative. PepsiCo CEO and chairman Indra Nooyi was a member of the Strategic and Policy Forum. The Campbell Soup Company CEO Denise Morrison had already stepped down from the Manufacturing Jobs Initiative by the time both were disbanded on Wednesday.

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Morrison’s statement reflects the sentiments expressed by her peers who had taken, or were having to consider, a similar course of action. “Racism and murder are unequivocally reprehensible and are not morally equivalent to anything else that happened in Charlottesville. I believe the President should have been – and still needs to be – unambiguous on that point,” she said.

Referring to the President’s ill-tempered press conference in New York on Tuesday, when he reverted to his initial controversial position of blaming both sides equally for the violence in Charlottesville rather than condemning white supremacists specifically, Morrison added: “Following yesterday’s remarks from the President, I cannot remain on the Manufacturing Jobs Initiative. I will continue to support all efforts to spur economic growth and advocate for the values that have always made America great.”

That the business community has only now finally lost patience with the President is not surprising. Conglomerates thrive on political influence and seek, not least through investing billions in political lobbying, constructive and amicable government relations. In apparent contrast to the President, they abhor confrontation which is seen as entirely counter-productive.

There were parts of the Trump agenda that were and still are appealing, notably the focus on deregulation, an area of no little significance to the food sector. 

Like other US-based global conglomerates, multinational food firms have more misgivings about the protectionist elements in Trump’s vision for industry and business. However, a close and constructive relationship with the administration is just as important when looking to temper those aspects business finds least palatable. Hence, the food sector’s active engagement in updating NAFTA. 

Corporations will naturally support the idea of investment in infrastructure and jobs, even if the Trump message here is heavy on rhetoric and light on policy. In any event, if the President was short of policy ideas, participating in advisory committees offered a chance for business to fill that void, to influence and frame action to match the rhetoric.

Contemplating the election of a President from outside the political sphere may have been less concerning for business people than for politicians and politicos because at least he came from their side of the fence, even if the Trump corporate culture appears far removed from that of PepsiCo or Procter & Gamble.

Membership of the advisory committees clearly has value to CEOs and corporations. Lobbying may be where the heavy lifting is done but they are potentially accretive to a corporation’s soft power. They will not forego that on a whim.

Three months ago when Trump pulled out of the Paris climate accord, there were statements from CEOs supporting Paris and a few directly critical of the decision but only two CEOs resigned from the two committees. The pros and cons had been weighed up and on this issue, for the majority, there was more value in staying in the tent.

This week was quite different. Speaking as much to the importance corporations and brands need to attach to the values and ethical standards consumers increasingly expect of them, those CEOs who had already resigned from the two committees by Wednesday had made the decision that they had to dissociate themselves from the administration. 

Following a conference call on Wednesday morning, the remaining members of the Strategic and Policy Forum issued a statement. “As our members have expressed individually over the past several days, intolerance, racism and violence have absolutely no place in this country and are an affront to core American values. The President’s Strategic and Policy Forum was conceived as a bi-partisan group of business leaders called to serve our country by providing independent feedback and perspectives directly to the President on accelerating economic growth and job creation in the United States.

“We believe the debate over Forum participation has become a distraction from our well-intentioned and sincere desire to aid vital policy discussions on how to improve the lives of everyday Americans. As such, the President and we are disbanding the Forum. Job creation and supporting an inclusive pro-growth agenda remain vitally important to the progress of our country. As Americans, we are all united in our desire to see our country succeed.”

Members of the Manufacturing Jobs Initiative reportedly held a similar call on Wednesday morning and also informed Trump of their intention to disband.

The fact that so many, including Nooyi, held off from moving unilaterally after the President’s initial reaction to events in Charlottesville underlines these decisions were not being taken lightly. And the President’s reaction to the joint decisions possibly provides the clearest vindication for such caution.

According to reports, the administration agreed on Wednesday to the wording in the Strategic and Policy Forum statement, portraying the decision as a joint one between the President and the committee members. At 6.15pm the President tweeted he himself had taken the decision to disband the committees. Earlier in the week, he had referred to some of those who had already resigned as “grandstanders”.

Apart from apparently being at odds with the group’s own statement, the business leaders were at pains to make this separation as painless as possible for both sides. Once again, that is the pragmatic course of action. Industry sectors and corporations have spats with administrations and positions need to be taken but there is always – on both sides – the longer game to be considered.

What will be uppermost in business leaders’ minds is the deterioration – or disintegration in fact – of Trump’s relationship with the media. The press conference on Tuesday itself showed numerous examples of his fractured relationship with media conglomerates that are normally courted remorselessly. 

The CEOs of blue-chip corporations tend to expect a similar level of attention and arguably value a cordial relationship with the White House even more highly than the media giants. The Trump factor makes what happened this week very different from the spats past Presidents had with different business sectors during their terms. His unique form of personal communication via Twitter is precisely that – personal. If his tweets this week sounded like he took the decisions business leaders made personally, it is because he probably did.

The events of this week leave the relationship between business and the President at its lowest ebb since he took office. However, while the danger exists of a downward spiral in their relationship, as happened with the media, the circumstances are different. The media needed to carry on doing exactly what was making Trump so angry with them, so the relationship was almost bound to deteriorate further.

Business leaders only needed to make this important gesture once. They cannot disband these committees again but they can in the future find other ways to come back into the tent. The same pragmatism that delayed many of them from resigning will likely inform what they do during the coming months and remaining years of the administration.

There is mutual interest here too. The committees may have done comparatively little so far but the idea behind them was sound. As and when the administration seeks to follow up its rhetoric on job creation, infrastructure investment and industrial regeneration with policy, the practical support and expert input of CEOs will be an important resource.

What Trump’s actions this week, and others since his election underline, however, is it will likely have to be the business leaders who extend the olive branch. And, in due time they will, because that is the smart move.