Two of President Trump’s business advisory councils disbanded Wednesday, signaling what could be a shift by the corporate world away from the president.
The Strategic and Policy Forum and the Manufacturing Jobs Initiative dissolved after several several members stepped down in response to Trump’s comments regarding violent protests in Charlottesville, Va. last Saturday. The protests involved clashes between white supremacist marches and counter protesters which left one woman and two Virginia state troopers dead.
Trump belatedly condemned the marchers, saying the violence came from “many sides,” and he didn’t specifically call out the white nationalist groups until two days after the rally.
But the damage was already done.
Monday morning saw Kenneth Frazier, CEO of the drug company Merck, quit Trump’s manufacturing council. He was quickly followed by the heads of Under Armour and Intel, and by Wednesday morning the Strategic and Policy Forum agreed to disband after a 45-minute conference call.
What exactly does this mean for the president?
First, the development isn’t likely to change the opinions of Trump’s core base.
One of his talking points as a candidate was against large corporations outsourcing American jobs, an appeal to working class voters. Corporate donors and media executives were “all part of the same corrupt political establishment,” Trump said.
Outside of his base however, there could be repercussions where the business world is concerned.
Trump’s decision to load advisory councils with CEOs was as much an act for symbolism as it was for function. While their influence on policy was dubious, the panels were still good for Trump as far as giving him the appearance of supporting business interests and corporate America.
Business leaders behind Trump support him for his promises to cut down on regulations and institute meaningful tax reform. This would mean a stronger economy, which for them means a profitable atmosphere for themselves and their shareholders.
This support came in spite of Trump’s more unpopular policies. Jamie Dimon of JP Morgan put it bluntly in a BBC report.
“Do I agree with every policy or everything he says? No,” Dimon said. “But he is steering the plane we are on and I’m going to support him.”
But after Charlottesville, CEOs are finding themselves under more pressure to publicly renounce the president.
Their first duty is to create profit for their companies with as little risk as possible. Sitting as advisors to a president with Trump’s knack for controversy is more risk than some shareholders and board members are ready to swallow, Goldman Sachs board member Bill George said in an interview with the New York Times.
“These executives cannot live with customers who think they are in cahoots with someone who supports white supremacists and neo-Nazis,” George said.
Whether or not Trump actually supports Nazism is up for debate. But the risk that perception creates is all too real for the former council members, and it didn’t take long for most to jump ship once Mr. Frazier decided he wanted out.
Trump is already being openly defied in Congress by members of his own party, and his major legislative endeavors have stalled. However, lacking the full support of one’s party is nothing new in politics.
But losing the backing of business leaders means fewer friends in the private sector for Trump, and the mutiny only further isolates the president and his agenda. If Trump lacks representatives from the business community, his economic policies have less clout with business leaders outside of his personal sphere, which in turn makes it harder for CEOs and other business leaders to accept those policies.
This, plus the aforementioned defiance from Hill Republicans, only adds to the perception of an administration unable to make any significant headway in Washington. It isn’t likely to help Trump’s low approval rating either.
All of this is to say the president’s uphill battle for public support now faces yet another obstacle.
Trump surpassed all expectations in last year’s election. Time will tell if he can weather this latest storm from the business world.