In the dwindling days of the Trump administration, the division between big business and Republican Party broke open.
While American corporations have made real profits over the past four years, including lower taxes and a looser regulatory environment, President Donald J. Trump routinely pissed off big business leaders. The January 6 uprising at the Capitol and the refusal of Mr. Trump and many Republicans in Congress to recognize the election result was the breaking point that culminated in many large corporations condemning Mr. Trump and cutting off support for his allies in Congress.
But just because big business is at odds with the Republican Party doesn’t mean it is ready to consider every aspect of the democratic agenda. As President Biden seeks to undo much of Mr Trump’s legacy, including some initiatives advocated by large corporations, executives approach the new administration with a mixture of optimism and concern.
At the most basic level, many executives seem grateful to move from the Trump administration, which routinely surprised companies with abrupt changes to trade policy, immigration rules, and more.
“Companies hate uncertainty, and we’ve had chaotic uncertainty for a while,” said Andrew Liveris, who stepped down as DowDuPont chief executive in 2018 and is now a board member at IBM. “Trying to navigate the company as a company was very difficult.”
However, the prospect of higher corporate taxes and new regulations that could detract from profits is unlikely to fit well with a business world struggling to recover from the pandemic. “The rubber will hit the streets when we look at taxes and climate tariffs,” said Liveris.
Mr. Biden began executing his political agenda on inauguration day, signing 17 executive orders and actions in the Oval Office.
One re-signed the United States to the Paris Climate Agreement, a move praised by business leaders, many of whom protested Mr Trump’s withdrawal from the pact in 2017. On Twitter, Microsoft co-founder Bill Gates welcomed the move “The United States also has the opportunity to lead the world in preventing climate catastrophe.”
Other orders protected “dreamers” from deportation and appointed an official response coordinator for the pandemic.
Sundar Pichai, CEO of Alphabet, applauded on Twitter the “quick action against Covid aid, the Paris climate agreement and immigration reform” and said his company looks forward to “working with the new administration to help the US to recover from the US. ” Pandemic + growth of our economy. “
At least one early move by Mr Biden – his revocation of a permit for the Keystone XL pipeline – was quickly condemned by some business executives.
Jay Timmons of the National Association of Manufacturers, a group that a few weeks ago asked the cabinet to consider impeaching Mr Trump, criticized the move, arguing that the pipeline would have created 10,000 union jobs.
The Chamber of Commerce, another business group that had taken an increasingly hard line with Mr. Trump in the last few weeks of his presidency, also rejected the move, calling it “a politically motivated decision that is not based on science.”
The Biden Administration
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Jan. 22, 2021, 1:25 p.m. ET
“It will harm consumers and leave thousands of Americans unemployed in construction,” said Marty Durbin, an executive with the chamber.
More skirmishes could be on the horizon. Mr Biden has signaled that he is ready to levy taxes on companies.
“I am sure there will be conflicts over the corporate tax issue,” said Richard A. Gephardt, Democrat and former majority leader of the House.
The prospect of higher individual taxes is also likely to be suppressed by wealthy executives. In New York, Governor Andrew M. Cuomo recently introduced a tax hike for high earners. Should the federal income tax rate rise as well, it could result in an effective tax rate of more than 60 percent for some well-paid New Yorkers.
“It’s pretty tough,” said Kathy Wylde, executive director of Partnership for New York City, a trade group that represents many large employers.
Ms. Wylde added that possible changes in property taxes, which Mr. Trump lowered, could be a concern among business executives as well. “There’s probably nervousness in the real estate community,” she said.
However, increasing the corporate tax rate is a price that companies may be willing to pay in exchange for managing with more predictable positions on critical issues like trade and tariffs.
“You may like the Biden administration more than Trump because he messed things up so much,” said Gephardt.
Right now there’s a palpable sense of relief in boardrooms across the country. After four years in which Mr. Trump’s unpredictable outbursts resulted in abrupt policy changes and sometimes targeted businesses, executives let out a breath.
“Markets are relieved to be on the other side of the turmoil and uncertainty that Donald Trump brought with it,” said Brad Karp, chairman of the law firm Paul, Weiss. “You woke up in the morning and saw the president introduce tariffs, close borders, or fight against a company. Businesses need predictability and security. “
And while Mr Biden works to get the coronavirus under control, businesses large and small will support the new administration. The pandemic has decimated the economy, weighed on sales and led to mass unemployment. Measures the Biden government is considering, including a new stimulus package and a large government infrastructure program, could help stimulate economic recovery.
“Bringing Covid under control will be good for business,” Karp said. “An economic stimulus plan will be good for economic recovery. Infrastructure spending will be good for the economy. “
Immigration is another topic that large companies have reason to be optimistic about. Mr Trump has restricted immigration and capped the H1-B visa program that allows foreigners to work in the US, which has been a headache for many companies.
“America First guidelines don’t work for global business,” said Ms. Wylde. “They won’t be missing.”
Mr. Biden signed an executive order requiring the wearing of masks on federal properties. In contrast, Mr Trump politicized the wearing of masks and continued to disappoint business leaders who watched in dismay as arguments about masks erupted in their stores.
“Trump has lost a large part of the business world through the mask material,” said Ms. Wylde. “Without a mask mandate, law enforcement officers became business. That was a big problem for retailers. “
Some executives who have endorsed Mr. Trump are already welcoming the Biden administration. Nick Pinchuk, the executive director of Snap-on, a toolmaker based in Kenosha, Wisconsin, said he was confident the federal government would support efforts to empower the working class, such as retraining efforts and investment in education.
“It remains to be seen, but it looks like this government can prioritize these things,” Pinchuk said. While not all of his staff were happy with the election result, they largely disapproved of Mr Trump’s interference in the democratic process and appeared ready to give Mr Biden a chance.
“The business community wants the Biden administration to be successful,” said Blair Effron, co-founder of Centerview Partners, a consulting firm that works with many large corporations. “People understand the urgency of the moment for this country, politically, economically, health-wise and socially.”
