Let’s keep US economy safe from Trump’s feelings
President Donald Trump can’t say he wasn’t warned about General Motors.
In June, GM said that the various tariffs that Trump had either already imposed or was considering could “lead to less investment, fewer jobs, and lower wages for our employees.” These tariffs, the company said, risked “undermining GM’s competitiveness against foreign auto producers.”
Now GM has said it will lay off 14,000 workers and close five plants in North America. While the tariffs are not the only or even the principal cause of these declines, GM’s condition ought to make Trump think twice about the wisdom of the trade policies he has been pursuing.
Instead, he’s railed against GM. He said that it is “playing around with the wrong person” — namely him — and that GM “better damn well” open a new Ohio plant. And what if it doesn’t? Trump threatened GM with the loss of subsidies for its electric cars.
The episode illustrates some chronic features of this presidency that have undermined its effectiveness and could undermine the U.S. economy, too.
First, Trump tends to make policy spasmodically. GM made a decision that angered him, and he lashed out in public. His many fans will appreciate his directness and appreciate that he is angry about the same things that anger them. But the president keeps adding to his reputation for making idle threats, and even self-canceling ones.
Congress is not going to cancel the tax credits for electric vehicles, or take any other action against GM, to satisfy Trump’s desire for vengeance. It’s not going to do it in the lame-duck session, when Republicans are still in charge, and it is certainly not going to do it when Democrats take the House in a few weeks.
Perhaps the administration could take some steps against GM. But nearly any change in regulation or grant-making designed to put the com- pany at a disadvantage could be challenged in court on the ground that nakedly targeting a company for retribution is a violation of constitutional due process and other legal protections. Trump, by announcing his goals in public, has made any such action harder to defend.
Second, Trump (in common with other modern presidential candidates) overestimates the powers of the presidency. During the 2016 campaign, he said that Ohio’s factory jobs were “all coming back” if he won. In a Michigan town with another GM plant that’s closing, he said: “You won’t lose one plant, I promise you that.”
Now he speaks as though he believes that companies will change their strategies on a presidential say-so. They won’t, and he might not even be able to make them sorry for ignoring his bluster.
Third, the distinction Trump’s supporters sometimes draw between his words and his actions doesn’t hold up. His policies are sound, they say, even if his tweets are often boorish. Trump’s words can have an effect, however, even when he is announcing policies that will never be implemented. His shots at GM did lower the company’s stock price for a day, but it has rebounded.
Fourth, they might do some more lasting if subtler damage. Other presidents have been upset by corporate decisions but have responded in a more considered way. There is a norm against presidents’ bashing companies, and that norm, like other norms Trump does not observe, exists for good reasons.
It undergirds the rule of law and the free-enterprise system, related goods that have contributed to Americans’ livelihoods. In no country can businessmen make decisions with no regard at all for what political leaders think. In this country they can and do. That arrangement has generally worked out well. It would be a mistake to discard it, especially to discard it thoughtlessly.
We can sympathize with Trump’s feelings about GM, but we should be happy about how little Trump’s feelings have mattered in our economic life — and hope it stays that way.