Hard-bar­gain­ing Trump flus­ters U.S. busi­nesses

Pu­ni­tive tax, Air Force One tweets prompt fears

The Washington Times Weekly - - National - BY S.A. MILLER

Don­ald Trump promised to make bet­ter deals as pres­i­dent, and wasted no time bro­ker­ing what he said last Tues­day would be a $50 bil­lion in­vest­ment in the U.S. by a Ja­panese tele­com com­pany, but his hard-bar­gain­ing style also is rat­tling some Amer­i­can busi­nesses.

Boe­ing’s stock price took a nose­dive after Mr. Trump posted a Twit­ter mes­sage declar­ing that the Pen­tagon should can­cel its $4 bil­lion con­tract for a new Air Force One, just days after the pres­i­dent-elect stirred fears of trade wars by threat­en­ing — also on Twit­ter — to slap a 35 per­cent pu­ni­tive tax on com­pa­nies that move fac­to­ries abroad.

Whether mak­ing threats against Amer­i­can com­pa­nies or an­nounc­ing the cre­ation of tens of thou­sands of jobs in the U.S., Mr. Trump’s moves were en­tirely un­pre­dictable — a qual­ity that tends to un­nerve fi­nan­cial mar­kets.

Mr. Trump emerged from an el­e­va­tor in the lobby of Trump Tower ac­com­pa­nied by SoftBank CEO Masayoshi Son, sur­pris­ing re­porters there with an an­nounce­ment that the Ja­panese tele­com ex­ec­u­tive had com­mit­ted to a $50 bil­lion in­vest­ment in U.S. startup com­pa­nies that would cre­ate an es­ti­mated 50,000 jobs.

It was the sec­ond time be­fore tak­ing of­fice that Mr. Trump scored on the jobs front. Last week he an­nounced that he helped con­vince Car­rier to re­verse plans to close its In­di­ana fac­tory and move to Mex­ico, sav­ing 1,100 jobs.

“He is one of the great men of in­dus­try,” Mr. Trump said of Mr. Son, with whom he met dur­ing a day oth­er­wise oc­cu­pied with in­ter­views for Cab­i­net posts. “One of the truly great men.”

“I just came to cel­e­brate his new job,” said Mr. Son. “I said, ‘This is great, the U.S. will be­come great again.’”

Ear­lier in the day, it was Boe­ing that got taken by sur­prise. Mr. Trump tweeted: “Boe­ing is build­ing a brand new 747 Air Force One for fu­ture pres­i­dents, but costs are out of con­trol, more than $4 bil­lion. Can­cel or­der!”

The price tag cited by Mr. Trump in­cludes the life­time cost of the whole pro­gram, in­clud­ing re­search and de­vel­op­ment and the ac­tual build­ing cost for the two air­craft needed for the Air Force One fleet. The Pen­tagon or­dered the two spe­cial­ized air­planes last year, and they are sched­uled to be ready in 2023.

Shares of Boe­ing stock dropped by more than 1 per­cent in pre­mar­ket trad­ing after the tweet, but the price climbed back by the end of the day.

Mr. Trump’s spar­ring with U.S. com­pa­nies comes as he stacks his Cab­i­net with busi­ness ti­tans, in­clud­ing nam­ing hedge fund bil­lion­aire Steve Mnuchin as trea­sury sec­re­tary, bil­lion­aire in­vestor Wil­bur Ross as com­merce sec­re­tary and re­tail bil­lion­aire Betsy DeVos as ed­u­ca­tion sec­re­tary.

He in­ter­viewed Exxon CEO Rex W. Tiller­son for sec­re­tary of state last week.

The jab at Boe­ing, which Mr. Trump later ac­cused of “do­ing a lit­tle bit of a num­ber” on tax­pay­ers, ruf­fled feath­ers at America’s big­gest ex­porter and irked fi­nan­cial an­a­lysts.

“The chill­ing ef­fect on in­dus­try is huge, if you are a con­trac­tor,” Franklin Turner, a part­ner spe­cial­iz­ing in gov­ern­ment con­tracts at law firm McCarter & English, told Reuters news agency. “To think that in 140 char­ac­ters the pres­i­dent can can­cel a pro­gram is ridicu­lous. There would be a de­tailed re­view by le­gal pro­fes­sion­als on the mer­its of the ter­mi­na­tion.”

Mr. Trump ex­pe­ri­enced sim­i­lar back­lash from Repub­li­cans on Capi­tol Hill when he tweeted about pun­ish­ing U.S. com­pa­nies with a 35 per­cent tar­iff on their prod­ucts. They warned he would start a trade war and that U.S. busi­nesses from au­to­mo­bile com­pa­nies to farms would suf­fer.

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