Spurred by shareholders, employees or their own political ambition, U.S. business leaders are engaging more forcefully in public debates over hot-button policy issues.
It’s a trend taking shape as business’ steadfast backing of traditional GOP orthodoxy splinters amid fiery debate over President Trump’s actions on immigration, gun control and health care.
While some company executives say there’s a vacuum of leadership, both domestically and internationally, that they feel obligated to fill, their willingness to criticize the White House has some conservative investors concerned that companies are caving to liberal activists, a move they warn could ultimately alienate Republican voters and hit profits.
“Top leadership has realized that in today’s political climate, they cannot be mute observers and they have to reflect the values of the organizational body politic into their decision-making,” Abhinav Gupta, an assistant professor at the University of Washington’s Foster School of Business, said in an interview. “The most relevant public policy for corporations would be low regulation, lower taxes, and Corporate America largely still wants that. It’s a number of social issues where you can see the need to cater to the sentiments of the workforce.”
The politicization is both a response to, and a cause of, President Trump’s social media commentary singling out companies for praise or censure. While the impact of his attacks on firms he believes are opposing White House goals has become more muted over time, businesses remain fearful of the effect a Twitter barrage might have.
Pfizer’s stock, for example, dipped slightly in the aftermath of a Trump tweet about the pharmaceutical company’s decision to raise the price of several of its treatments. The drugmaker reversed its scheduled cost increases until at least the end of this year after consultation with the White House.
“The world’s in a position that people are retreating rather than coming in a more unified manner,” Delta Air Lines Chief Executive Officer Ed Bastian observed during a recent discussion at the National Press Club. “Business leaders increasingly today are being called into that vacuum to speak and to let people know where we stand on topics.”
The growing outspokenness has spurred speculation over the future political ambitions of some top executives, like former Starbucks CEO Howard Schultz, who stepped down as head of the coffee chain earlier this year amid rumors he was considering a presidential run.
While the impetus in many cases has been maintaining good will with employees or the public, the bottom line plays a far more powerful role.
“Businesses respond to their customers and if it threatens their viability or success, they are going to respond to it,” said Senate Majority Whip John Cornyn of Texas. “What emboldens some of these folks is that [the opposition is] loud and vocal, and there is nobody sort of pushing back or offering a countervailing point of view.”
When Trump assumed office, U.S. businesses and investors optimistic that the GOP’s traditional support for lower taxes and less onerous regulation would accelerate growth often found themselves on the defensive because of the administration’s policies or the president’s unguarded remarks.
In the early days of his term, for example, Trump signed a travel ban to limit immigration into the U.S. from predominately Muslim countries like Libya, Yemen and Syria. Its abrupt imposition left even some legal residents of the U.S. struggling to re-enter the country after trips abroad and spurred criticism from top domestic companies like Amazon, Apple and General Electric.
Controlling immigration into the U.S. nonetheless remained a cornerstone issue for the administration, and public opposition hit a fever pitch with the White House’s decision to begin separating migrant children from their parents at the U.S.-Mexico border. Companies like United Airlines quickly moved to distance themselves.
“We have contacted federal officials to inform them that they should not transport immigrant children on United aircraft who have been separated from their parents,” Chief Executive Officer Oscar Munoz said in a statement. “This policy and its impact on thousands of children is in deep conflict” with the company’s mission, he said, “and we want no part of it.”
The most unified opposition has been generated by the administration’s protectionist trade policies, which have the most direct impact on corporate earnings. The administration’s attempt to renegotiate the North American Free Trade Agreement with Canada and Mexico, which Trump has called a terrible deal, has the potential to disrupt cross-border supply chains particularly valuable to retailers and automakers.
At the same time, the White House has levied tariffs on $34 billion worth of Chinese goods with at least $16 billion more on the table.
Trump threatened to follow up on those with tariffs on a total of $500 billion in imports if Beijing retaliated, and the U.S. Trade Representative announced in mid-July an additional $200 billion in products that made good on part of the president’s statement.
Those duties would come in tandem with previously imposed double-digit metals tariffs and a proposal to add 25 percent levies to automotive imports. Traditional U.S. trading allies like Mexico, Canada and the European Union have all retaliated.
“If you’re going to interfere with the flow of people and the flow of goods and change the cost of both of those and make them uncertain, that’s a lot different than anything that’s gone before,” Peter Bragdon, vice president and general counsel at Columbia Sportswear, said in a recent interview. “Certainly, [that’s] different than the trajectory of the last few decades.”
The fear of a trade war is spurring opposition from Republican-friendly organizations like the U.S. Chamber of Commerce and the National Association of Manufacturers. It is also eliciting intense criticism from GOP leaders in Congress, though to date, both the House and the Senate have been unwilling to curb the president’s power to act on his own.
To some conservatives, the growing political activism of Corporate America signals an ideological shift that they say Republicans are not prepared to counter.
“The left is at their door on every issue hammering them,” said Justin Danhof, general counsel for the National Center for Public Policy Research.
He leads the conservative group’s Free Enterprise Project, an initiative that aims to engage with corporations through shareholder activism on more politically relevant business decisions. Danhof recently pressed Dick’s Sporting Goods CEO Ed Stack on the company’s decision to raise the minimum age to purchase a firearm in the aftermath of a Florida high school shooting that left 17 dead.
U.S. companies are also facing shareholder pressure at annual meetings to address liberal causes like executive diversity and minority pay gaps.
“It’s a squeaky-wheel situation where people in their workforce feel very open to talk about this support of liberalism and LGBT issues and on the other side of that, you just stay quiet,” Danhof said. “They are hearing only from their liberal employees.”
