Two of the White House’s top corporate advisory groups disbanded Wednesday in a direct affront to President Donald Trump, as the fallout from his controversial statements about who was to blame for violent protests involving white supremacists in Charlottesville, Virginia, cascaded beyond Washington.
The exodus of business advisers comes as a stinging rebuke to the president, who had sold himself as a businessman whose dealmaking prowess would pay off for companies and workers. It also stands as a remarkable breach in relations between Trump, the leader of the Republican Party, and a business community that historically has had an ally in the GOP.
Condemnations from business leaders, representing all corners of American industry, were striking for the ways they personally critiqued Trump for failing to attempt to unify the country in the wake of the violence in Charlottesville over the weekend.
“Constructive economic and regulatory policies are not enough and will not matter if we do not address the divisions in our country,” JPMorgan Chase chief executive Jamie Dimon, a member of Trump’s “Strategy & Policy Forum,” wrote to his employees Wednesday after the councils were disbanded. “It is a leader’s role, in business or government, to bring people together, not tear them apart.”
“Racism and murder are unequivocally reprehensible and are not morally equivalent to anything else that happened in Charlottesville,” Campbell Soup chief executive Denise Morrison, a member of the White House’s Manufacturing Jobs Initiative, said Wednesday morning, before the announcement. “I believe the president should have been – and still needs to be – unambiguous on that point.”
Trump came to office amid high hopes that he could work closely with the business community – after his predecessor, Barack Obama, had faced criticism for pushing for overregulation. Executives largely viewed the GOP’s control of the White House and Congress as a rare opportunity to cash in on a wish list of policy goals that they felt would help their firms and the economy, such as tax cuts and regulatory rollback.
But after an initial courtship between Trump and chief executives during his first weeks in office, business leaders have grown increasingly uneasy with his erratic leadership style and divisive statements, in which Trump often uses Twitter to criticize companies and executives he earlier praised. The severing of ties Wednesday represented the culmination of a rapid decline in that relationship.
“It’s entirely stunning,” said Bill George, the former chief executive of medical devices giant Medtronic and a Harvard Business School professor. “He gave them great access. They’re on these councils, and all those industry committees are coming together. Now they’re saying, ‘I can’t tolerate this.’ ”
“This has never happened – not in my lifetime,” George said.
Although Trump said on Twitter on Wednesday afternoon he was shutting down the advisory councils – to avoid “putting pressure on the businesspeople” – momentum was already moving strongly in that direction.
After Trump made equivocal comments about who was to blame for violence at rallies held by white supremacists and neo-Nazis in Charlottesville over the weekend, Ken Frazier, the chief executive of pharmaceutical giant Merck, resigned from Trump’s manufacturing council Monday.
Trump fired back on Twitter, saying Frazier, one of the few African-American business leaders in Trump’s orbit and someone he had just recently called one of the “great, great leaders of business,” could now work to “LOWER RIPOFF DRUG PRICES.”
He added that he could easily find executives to replace those who left.
But the reality was quite the opposite, and several other executives followed Frazier’s lead.
On Tuesday, Trump made more controversial statements about Charlottesville, including one that appeared to show sympathy for some of the people who marched with neo-Nazis and white supremacists. The weekend’s protests had turned violent, and one person had been killed.
Tuesday was the turning point for many executives on Trump’s business councils, who set up conference calls with one another Wednesday morning to discuss whether and how to sever ties with the White House. “Tuesday was a point of no return,” a person on one of the conference calls said.
Many of the executives on the conference calls indicated they planned to resign from the advisory councils. Stephen Schwarzman, the founder of Blackstone who chaired one of the groups – the Strategy & Policy Forum – crafted a statement saying the group would be disbanded.
Schwarzman did not respond to requests for comment.
Jeff Immelt, a member of the manufacturing advisory group and chairman of General Electric, said he found Trump’s statements on Tuesday “deeply troubling” and had told others earlier Wednesday that he was resigning.
“The committee I joined had the intention to foster policies that promote American manufacturing and growth,” he said. “However, given the ongoing tone of the discussion, I no longer feel that this council can accomplish these goals.”
Corporate angst about Trump began immediately after he took office, with many chief executives – particularly those in Silicon Valley – repudiating his executive order that sought to block the entry of people from seven Muslim-majority countries into the United States. His views on climate change also led to some estrangements, including with Tesla founder Elon Musk, who resigned from Trump’s business councils after the president announced he would withdraw from the Paris climate agreement.
But many executives found ways to heap praise on Trump and let him take credit for retaining factories or creating new jobs, even though some of those plans were already in the works before his election.
Intel, for example, announced it would create 10,000 new jobs following Trump’s election through construction of an Arizona facility, but it had already announced plans to expand operations in Arizona back in 2011. Similarly, Trump touted a March announcement by Charter Communications to invest $25 billion in the United States, but the company’s jobs plan was in motion as early as 2015.
Other companies, however, announced fresh plans to build and hire thousands of new workers. One of these – e-commerce giant Amazon – was celebrated by Trump last year when it announced it would be hiring 100,000 workers. Then on Wednesday on Twitter, Trump excoriated the firm – which for years did not collect state sales tax, though now it does – for “doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt – many jobs being lost!”
Trump has criticized Amazon founder and chief executive Jeffrey P. Bezos for coverage of The Washington Post, which Bezos owns, suggesting he is using it to advance his financial interests. The Post’s editors and Bezos, who has met with Trump as part of a White House advisory group called the American Technology Council, have declared that he is not involved in any journalistic decisions.
Trump formed corporate advisory groups in part to show how closely he was pulling in corporate executives after they often complained about tax and regulatory policies during the Obama administration. Trump promised them the largest package of tax cuts in U.S. history and a $1 trillion infrastructure package, but those plans have not materialized, while frustration with his comments and leadership style has grown.
On Wednesday, even the Wall Street Journal’s editorial page, which often reflects the pulse of corporate leaders, said the resignations of chief executives should concern the president. “A GOP President who loses the business class has a big problem,” the editorial page declared.
Trump has long said his background in real estate and numerous business ventures give him unrivaled expertise when it comes to rebuilding the U.S. economy, which has seen weak economic growth since the financial crisis in 2008 and 2009.
Before he became president, he railed against the state of the economy, decrying the loss of manufacturing jobs and dismissing the steadily rising stock market as a “big fat, ugly bubble.”
But on Tuesday, before his comments about the rally by white supremacists, Trump had a much different take on the economy. He said the “country is booming. The stock market is setting records. We have the highest employment numbers we’ve ever had in the history of our country. We’re doing record business.”
Trump’s eroding corporate support comes at a time when he faces numerous tests on Capitol Hill that will directly influence the economy and financial markets. The White House and Republican leaders in Congress are discussing ways to jointly push through an overhaul of the tax code in the remainder of 2017 that cuts taxes and allows corporations to bring back trillions of dollars in overseas earnings to the United States.
Congress must pass legislation to keep the government operating past Sept. 30, and Trump has signaled that he is willing to allow the government to shut down if Democrats won’t give him money to build a wall along the Mexico border.
Congress must also vote by late September to raise or suspend the debt ceiling. Failing to do so, many chief executives and economists believe, could lead to a financial crisis, recession and a spike in interest rates. The White House has given different takes on how it believes the debt ceiling should be addressed, but it recently has called on Congress to raise the debt ceiling.