Hard-bargaining Trump flusters U.S. businesses
Punitive tax, Air Force One tweets prompt fears
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.