September 17, 2025 • 27 mins
Host Stephanie Flanders, Bloomberg’s head of government and economics, is joined by Bloomberg managing editor Shelly Banjo and senior reporter Ian King to discuss how Trump has changed the rules for corporate America, and whether this marks a permanent change.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. In the case of
Intel is interesting, but I hope I'm going to have
many more cases like it.
Speaker 2 (00:12):
You know, you do have stupid people say, oh, that's
a shame.
Speaker 1 (00:15):
It's not a shame.
Speaker 2 (00:15):
It's called business.
Speaker 3 (00:29):
I'm Stephanie Flanders, head of Government and Economics at Bloomberg,
and this is trump Andomics, the podcast that looks at
the economic world of Donald Trump, how he's already shaped
the global economy, and what on earth is going to
happen next. This week, we're sparing a thought for the
boardrooms of corporate America and how trump Andomics is working
out for them. Donald Trump has involved himself more directly
(00:53):
in American businesses on a wider range of issues than
any president in living memory. He weighs in on social media,
in the courts, and especially in the Oval office. So
is it just Trump being Trump? Or will history also
say this was the point where the US embraced the
kind of state run capitalism previously associated with Moscow or Beijing.
(01:16):
Just a few examples to introduce the thought. In late August,
you'll remember, the President sealed the deal that gave the
US government a nearly ten percent stake in Intel.
Speaker 2 (01:26):
Corps, celebrating that he got it the zero what this
means future?
Speaker 3 (01:30):
Shortly after calling on social media for the CEO of
that semiconductor company to resign, the President's banned American chipmakers
from exporting chips to China, only to change his mind
a few months later after the CEO of the chip
giant in Vidia, paid the President to visit and agreed
to pay the government a fifteen percent tax on those
(01:50):
chip sales.
Speaker 2 (01:51):
Of the revenues that they make from those sales into
the China market of the age twenty when it comes
to Nvidia or AMD's equivalent once they start shipping those.
Speaker 3 (02:00):
Something we don't yet know is even constitutional. America's commander
in chief has also weighed in on everything from changed
restaurant logos and clothing commercials causing stocks to jump or
sink on the basis of late night truth social posts.
Speaker 1 (02:15):
American Eagle shows are up twenty four percent right now,
and this is after President Donald Trump came out in
support of the controversial ad with Sidney Sweeney in it.
Speaker 3 (02:26):
And just this week, for example, he weighed in on
a long standing feature of US corporate life, saying apropos
of nothing in particular that companies should have to report
on a six month basis their earnings, not quarterly. So
ow are CEO's handling all of this? What is the
Trump playbook for them? And where are all of those
interventions taking corporate America American capitalism. Well we're going to
(02:50):
get into that right now with Shelley Banjo, Bloomberg's Managing
editor for Global Business in America's who spends at least
part of her time talking to chief executives who come
through our doors in New York. Shelley, great to have.
Speaker 1 (03:02):
You, Thanks for having me, And from.
Speaker 3 (03:04):
San Francisco, Ian King, a reporter who covers semiconductors, hardware,
and telecoms for US at Bloomberg. Thanks Ian, follow that, Shelley.
I noticed one of our esteemed colleagues, West Kasova wrote
this week a brilliant CEO guide to getting what you
(03:25):
want out of Trump. I mean, if someone was trying
to devise MBA courses now on handling this second term
of President Donald Trump, you know, seven months in, what
do you think will be in that kind of class?
Speaker 1 (03:40):
I think the first thing is do not come empty handed.
You know Wes's wonderful story, as you point out, talks
about this trophy that Tim Cook has prepared for him.
We had the Coca Cola CEO come in with a
personalized bottle for Trump and we can sort of mark
this or laugh, but the indication is I am here
to kiss the ring and I want to start that
(04:02):
from the outset, the way you would go and visit royalty.
Speaker 3 (04:05):
We've been talking about this over the last few days.
It's not just these sort of you know, public times
where you go to the White House and you lobby.
It's also just the sort of never quite knowing what's
going to happen next.
Speaker 1 (04:18):
Right exactly, because you can understand what Trump might be
after on you know, sort of the policies that he's into,
but as a CEO, you're sort of living in fear
that you're going to be the subject of a truth
social post. And that is something that businesses and CEOs
are are terrified of because it's very hard to plan for.
(04:40):
You can't really come up with a business case of
what to do when this happens. The one CEO we
had in last week told us that they actually did
do a simulation with a board of what happens when
you are the subject of a true social post. So
it's a conversation they're having at the board level.
Speaker 3 (04:58):
And it's funny because I know people who do do
some of these trainings. And obviously our social media is
not a new thing, and I've heard sort of government
relations and others talk about how does one handle it
if there's a Twitter storm over something. You know, airlines
deal with it all the time when you've got you know,
some prominent person stuck in a long line all their
(05:18):
plane gets delayed. But I suspect, you know, there's a
whole different set of rules if you're dealing with the
commander in chief.
Speaker 1 (05:24):
Absolutely, and it moves market. We saw with the Cracker
Barrel example that they you know, spent a lot of
time putting out a new logo didn't look all that
you know, controversial at the time. Cracker Barrel, the famous
US restaurant chain, faces and tense.
Speaker 2 (05:39):
Backlash after it tried to swap its own logo for
a sleek new design and.
Speaker 1 (05:44):
All of a sudden, it's sort of you know, stirred
up a storm saying, you know, why are you erasing
our history? And so there was a huge backlash, and
all of a sudden, you know, Trump is weighing and
those stock prices going down, and this CEO has to
make decision. Am I going to stand up for this?
Am I going to you know, fall back? And in
the end they cave. They said, you know, we're going
(06:06):
to go We're going to go back to how it was.
We're sorry. And if you think about that exercise, you're
sitting there just developing a brand logo, you don't necessarily think, okay, well,
what is the president going to think about this rand logo?
Speaker 3 (06:20):
We talk about audience of one, yeah.
Speaker 1 (06:22):
And now and now you do. And so we had
the Alaska Airline CEO in a couple of days ago,
and I asked him about this because they also changed
their logo recently, and he said, it's not an excuse
to say like we didn't think about it anymore. Like
we live in this world where you have to think
about that. You have to think what's going to happen
if you know, the social media folks, if the president,
(06:44):
if whoever, is going to come out against you, what
is your plan? And the anxiety that he said he
was feeling as he was changing his logo.
Speaker 3 (06:51):
So Ian We do know that the president likes doing
big deals and talking to big companies who then make
promises with lots of zeros attached. When it comes to
investment in other things. Obviously the big tech giants, the
likes of Google and Apple, you know, there's been a
lot of that in that area. But also in the
area that you cover, we're obviously thinking more and more
(07:13):
these days about AI and the semiconductor chips that go
into AI. You know, how has the world changed just
for the companies and that that you cover in the
last seven months.
Speaker 2 (07:24):
I mean it had already changed. We inherited an environment
from the Biden administration where there was a unique level
of government interest, whether that government was in Washington or Beijing.
The industry had become a tool of geopolitics. What's changed
under the current president is the predictability. And on the
one hand, the CEOs of the companies that I believe
(07:48):
they've cracked the code. You know, they believe that sort
of flattery gets you everywhere. They have a certain pattern
in terms of behavior that they exhibit. Now they will
go to the White House, they will come out of
the security gains, they'll look into a TV camera and
they'll say the following words, which is, are we are
so lucky to have this president who is uniquely interested
in our industry, And then they will quote some large
(08:10):
dollar number which frankly, quite often isn't really related to
anything concrete. And that pattern appears to help them in
their relationships and allow them to open doors to other things.
But on the flip side of that, as Shelley said,
there's an element of unpredictability that has been introduced in
terms of we are one social media posting away from
(08:32):
a massive intervention in the fate of our company, in
our company's earnings and our company's profits, and I think
that is definitely taking its toll.
Speaker 3 (08:41):
I mean, we obviously saw the kind of embarrassing example
of that. The off mic moment was when Mark Zuckerberg
had a Meta was kind of caught after one of
these sessions in the White House where he'd announced a
big number for what Meta was going to invest, and
then he was heard to be saying, oh, to the President,
I wasn't sure what number to use. I hope that
was all right right now, which sort of goes to
(09:09):
this choreography that people are engaging with and not necessarily
a great attention to what the actual number is, at
least from from a business standpoint. But I guess the
most extreme example ian for those who didn't haven't followed
every turn, was where we ended up, where we started
and where we ended up with the chief exec of Intel, Bhutan.
(09:30):
So just talk us through what happened to him, because
there was a sudden true social post about him saying
he must be conflicted and must resign, and then the
President said there is no other solution to this problem,
but then it turned out that there was.
Speaker 2 (09:43):
Yeah, this was an alarming moment I think in corporate history.
This gentleman was brought in to rescue Intel. He is
of you know, he's originally Malaysia, he's an American citizen.
Now he's of Chinese background, and there was a political
so of campaign to try to undermine him because of
his investment links to China, links that we don't even
(10:06):
know exist anymore. But it was certainly historically was a case.
And what happens as the President saw that seized upon
it and immediately jumped to the conclusion that Bhutan, the
CEO of Intel, a publicly traded company, was in fact
conflicted and should step down. That was a call he
made a week later. Lit Bhutan is in the White House.
Everything is great, and this chipsacked money that had been
(10:29):
assigned to Intel under the Biden administration is suddenly switched
into shareholding stake for the US government in Intel. So
I mean, how do you follow that, how do you
plan for that? How do you run a company with
that kind of set of possibilities in the air. And
the answer is you don't. You just react, And that's
(10:49):
not a way to run a company.
Speaker 3 (10:51):
There's been some Republicans and certainly some sort of pro
market conservative commentator who've raised both eyebrows at that deal.
But I think it's very striking how little opposition there's
been to it or sort of concerns about it. And
I guess one has to just for completeness. I mean
(11:13):
in video is the other area, the other big deal
that the President has made, which financially is probably even
more significant for the company We're talking about much bigger numbers,
but also could be quite significant strategically for the US.
Speaker 2 (11:28):
Again, it's geopolitics influencing the US policy. The underlying desire
is to prevent China from getting access to advanced semiconductors,
because we believe in the US that is against national
security interests. But somehow that's become negotiable. Somehow that has
become the subject of a real estate deal. And if
(11:49):
in Video and AMD, which is a smaller company doing
roughly the same thing, are allowed to send a certain
type of chip to the China, now a reduced capability chip,
then they can do that, but with the provider that
they give the US government effectively a kickback fifteen percent
of that and as a whole, as you alluded to
us or concern about whether this is even legal. We
(12:11):
spoke with the CFO of Nvidia, so this is the
world's largest publicly traded corporation. We asked her about how
are you going to pay this fifteen percent and she said,
I'm not there's no rules, there's nothing that. Effectively, what
she said was, this is illegal. If I do this,
I'm breaching my fiduciary duty. Can't do it until they
give me a set of rules to do it. Those
rules have not emerged, so right now it's not going
(12:33):
to happen.
Speaker 3 (12:43):
Shelly, I do want to get back to you because
something that strikes me when you think about the kind
of training that anyone who gets to the top of
a company will have had, either implicitly or explicitly. I
was sort of thinking about it as before we started this,
the implicit messaging has always been you want to do
everything you can to ingratiate yourself with the government whatever
(13:04):
country you are, but without it being evident and without
necessarily calling attention or raising any question marks. Whereas it
seems that this is the opposite in this administration. Whatever
you do to ingratiate yourself has to be completely open
and ideally you know, in the Oval Office with cameras rolling.
That is quite a shift, And I just wonder, you know,
(13:26):
are there even sort of legal worries in these boardrooms
about needing to really very publicly engage in sort of
quid pro quos with the federal government.
Speaker 1 (13:39):
Yeah. I mean the most striking example of that has
obviously been Elon Musk and Tesla and sort of how
close you get to the president where you're literally in
the White House making and helping informing these decisions. And
we saw the impact on Tesla people stopped buying Tesla cars.
You can sort of negotiate how much of that had
(14:02):
to do with his association with Trump, how much it
had to do with other things. But you know, even
we had the board chair of Tesla into Bloomberg this
or this last week, and you know, even she said,
as part of the negotiations with Musk for his pay package,
like we would like to see him focus on Tesla,
And so, you know, it does sort of raise the
(14:23):
question of, you know, how much is it you're just
doing your job as CEO includes now managing the emotions
and the whims of the US President, and how close
is too close and how far is too far? I mean,
you haven't really seen a consumer backlash quite like at
Tesla at other companies, and so I think some Americans,
(14:46):
consumers and probably consumers around the world are sort of
inerrod to it a little bit. They understand that this
is part of the job. I think it's also a
question of are people really going to do what they
say that they're going to do, because I think a
hallmark of the Trump press tency is We're throwing a
lot of big numbers at you, a lot of big stuff,
a lot of big threats. You don't know which ones
are gonna come true. This week, you had the TikTok
(15:09):
deal come back into focus. I remember when I was
living in Hong Kong in twenty eighteen, twenty nineteen, twenty twenty,
you know, the first Trump presidency, we were talking about this,
and so, you know, fast forward to twenty twenty five,
we're still talking about the same thing that Tramp was
talking about. We're still talking about tariffs. Like there's some
(15:29):
things that just haven't happened yet. So how do you know,
as the CEO, which ones to take seriously and which
ones you don't? And I think the answer has become
as Ian sort of alluded to, like you have to
take them all seriously. But I don't know, you know,
how much do consumers really get impacted by that?
Speaker 3 (15:43):
You know, A part of the story of American capitalism
was always sort of slightly economical with the truth. You know,
there has always been an enormous amount of subsidies and lobbying.
When I worked in the US Treasury, you know, having
been brought up in the UK, the half from American,
I was sometimes surprised by the sort of assumption that businesses,
(16:06):
the sort of the closeness of the lobbying and the
closeness of the business relationships was certainly something that was
different from the UK and seemed to be part of
the American tradition that you'd have businesses weighing in very
directly on you know, deals that were being done and
other things, and there was no question of any wrongdoing.
It was just like the way things happened. So, I mean,
given that, is it surprising that you haven't had more
(16:28):
businesses sort of say, hang on a minute, what kind
of capitalism is this?
Speaker 1 (16:33):
For sure? And we're seeing that right now build up
all these companies, build up their presences in Washington. They're
hiring the firms that are aligned with Trump and people
who had come out of the Trump one point zero
administration who have now started out their own lobbying firms,
and they're coming out and saying that outright that we're
not hiding. This is what it means to be a
good CEO in this moment in twenty twenty five. And
(16:54):
so is our companies getting closer with the US government
or are the administration's goals Probably I'm not sure if
any of the consumers or investors seemed to care at
this moment. So far, we haven't seen in some sort
of big outcry or anything like that.
Speaker 3 (17:10):
I guess so far we've mainly seen stock prices go
up rather than down, which makes a difference exactly Ian
if we just think about the potential long term implications
of this. And I've seen that there's been a debate
around this, some saying that America is embracing for better
or worse and more of a kind of Chinese style
state run capitalism. Other people I saw Michael Strain, the
(17:33):
director of Economic policy Studies at the American Enterprise Institute, said,
you know, this is Trump being Trump. This is opportunism
and a sort of thrill about having deals being done
from Donald Trump. It's not a big ideological shift. I mean,
even those two examples that you and I just talked about,
taking a strategic share in an industry, a US company
(17:56):
that makes something chips that we know is going to
be sort of central to the future of the global economy,
it doesn't seem of all the things that Donald Trump's doing,
that didn't seem to me like the craziest thing. And
it certainly is no different from some countries you know
that aren't China, like France, for example.
Speaker 2 (18:13):
Yeah, I mean when you unpack that there are a
number of elements which I think talk to your point here.
The first point is that he inherited and an apparatus
called the Chips Act from the Biden administration, and that
was the kind of Sauz Korea and Taiwanese development, state
directed capital development. Hey, we will give you money as
a company if you do this certain type of thing.
(18:35):
And that was the situation that Intel and a lot
of its peers were in. What Trump said all along
was I don't like this. This isn't market capitalism, this
isn't the kind of thing that the US government should
be doing. What we should do here is and then
turn this into a loan. So what there was a
lot of to and fro about this, But what he
did was turn it into basically taking a stake and
(18:56):
tried to sell that to his constituents, the US tax
players as hey, this is a win for us. We've
got something. This is a transaction. This is back to
that real estate deal mentality. So it was a complicated
situation there. The other side of it is the geopolitical thing.
There's one through line through the first Trump administration, the
Baden administration, and the current Trump administration, which is the
(19:19):
concern the geopolitical rivalry with China, and that is a constant,
that is something which has only increased. The only wrinkle
has been hold on them and it maybe we'll let
in video them, We'll let AMD give the Chinese some
of these old type chips, and that's the only wrinkle.
Speaker 3 (19:37):
Well, and you say it's the only wrinkle. I mean,
we've discussed it in the past on this show with
from of our geoeconomists, at least one of whom was
very heavily involved in the Chips Act in the Biden
National Security Council. And I think that was the one
that everyone has found very hard to square. If you
think about the objectives of the first Trump administration highlighting
(19:58):
the risk of China, the way that Biden's administration kind
of institutionalized that and to some extent developed it in
the form of the Chips Act and some of the
export controls that they put on, and the way that
continued in the first few months of the Trump administration
with the initial ban on those chip sales. The reversal
of that, you might say, just for the sake of
(20:19):
a few bucks for the federal government, That's the one
that people find hard to square in the kind of
policy community. Is that also true in Silicon Valley or
they just think, oh great.
Speaker 2 (20:29):
No, I think it's back to what we were talking
about earlier, which is the ability of CEOs to say
the right thing to appear at the right time. And
what has effectively happened here is that the Trump administration
has adopted the language and the thinking of In Video Corporation.
Here in Video has said, Look, these tips are so
old now they don't matter. We're not even sure that
(20:50):
the Chinese want them. Why can't we just send them
there anyway and get that bit of money that we'll
get for them, and we'll use that money to make
America great again by paying for our Otherwise, if we
don't do this, we't have any presence in China. They
do their own thing, and we've lost completely. And they've
constructed this logical framework that kind of has the cogs
(21:10):
have mashed with some of the geopolitical concerns, some of
the free market concerns that exist around this intervention and
made it work. And whether it's Howard Lutnik or others
have just decided to adopt this and allow this to happen,
and then you have the man at the top who said, well,
give me fifteen percent and you're okay. That I think,
and the way it was done has caused concern, But
(21:33):
the fundamental logic, I think a lot of the even
the hawks, are like, well, okay, I can see.
Speaker 3 (21:38):
That, Shelley. I wonder whether anyone has observed that to you.
I mean, there's a lot of deals that aren't really deals.
They're not deals in the kind of corporate sense of oh,
there's a bit of paper or many many pieces of
paper and lawyers in the room and kind of clear terms.
Sometimes they're unwritten. Sometimes we find in some of the
trade quote unquote deals that in the case of Vietnam,
(22:00):
for example, there was a profound disagreement about what the
actual deal was after it was supposed to have been done.
That is part of the issue, isn't it that this
is these deals are sort of semi deals until the
next deal.
Speaker 1 (22:10):
Yeah, they're squishy. And I think going back to your
original question of what is chapter one, two, three, four
of the Trump playbook, coming up with a big number
that can't necessarily be tracked and promising it to the
Trump administration probably deserves a chapter in that playbook, because
you know, you look at a company like Hyundai, you
look at these drug makers Johnson and Johnson. They're all
(22:32):
coming up with these numbers and they're putting it forth
and I'm sure that they can justify it. But some
of these numbers account for factories they built five years ago,
inspired by Trump, maybe in Trump one point I zero.
So they're squishy numbers, they're squishy deals. The examples that
Ian site are a little bit more specific, but a
lot of these manufacturing commitments that these companies have done,
(22:54):
and these ribbon cutting type scenarios are not some things
that you can necessarily try and really hold my accountable.
Speaker 2 (23:02):
Shit.
Speaker 3 (23:03):
I don't want to put you on the spot, but
just before we end, it occurs to me that before
you came back to New York and when you and
I first met in Hong Kong, and we tend to
think that this is more of a quote unquote Asian
way of doing things, you know, to have more of
these kind of backroom deals and state government sort of
strategic involvement. Does it feel similar or does it feel
like something completely unique to Donald Trump.
Speaker 1 (23:26):
It's such astute question because when I was sort of
reflecting on this idea of is this just the now,
Is this the CEO saying I need to get through this,
I need to move on to the next thing, or
is there lasting impact? I think I came to the
conclusion that the lasting impact is that the window can shift,
and that you know, if Trump pushes the envelope. Now,
(23:47):
mixing my metaphors a little bit, but if Trump push
the pushes on the pushes the one you know right exactly,
then then it sort of like opens it up for
anything to happen. And that's sort of what had happened
with China in so many different ways over the last
you know, number of decades, right, You start to normalize
things little by little by little by little, and then
(24:09):
you look back and you see, wow, this actually this
whole thing has created monumental shift.
Speaker 3 (24:15):
I wonder ian we think of the tech world now
and semiconductors in particular, as being something that is moving
incredibly fast and potentially decisions made now could be affecting,
you know, the whole path of AI as it sort
of takes hold of our economies and our societies. Do
you think there are some lasting shifts here or is
(24:38):
it going to be a sort of a kind of
Trumpian fever dream.
Speaker 2 (24:42):
No. I think lasting shifts are in the all thing,
that there is an absolute policy in place, whether it's
in Beijing, whether it's in Washington, whether it's in this
whole or Taipei, and that structuring things in a way
that those economies and those sets of capabilities will succeed.
I lived in career for eleven years. Korean companies, they
succeeded because the government decided that semiconductors were important. Taiwan
(25:09):
t SMC, they succeeded partially because taipaid made that a
national priority. That's happening in the US, and that's unprecedented
obviously in many respects for the US. How it's done,
whether it's done in an organized fashion, whether it's done
in a logical fashion and a consistent fashion, to your point,
is really important because guess what, the chips that are
(25:29):
being designed today, the TIC chip technology that is being
designed today, won't really be relevant for at least two, three, four,
five years. And even though the industry is moving very quickly,
you are basically plotting your path towards success or disaster
right now. So again, this mixture of countervailing forces on
(25:50):
the one hand, yes, interest is good, Yes, capital is good. Yes,
using restrictions is good. On the flip side of it,
inconsistency is also kind of an anathem so the chip industry,
because it's such a difficult thing to do and it
plays out over such a long period.
Speaker 3 (26:06):
Well, I think that is the point we've often reached
in these conversations. You know, in principle, quite a lot
happening here that could well make sense for America, for
the world, but the way it's being done and the
exact decisions raising some question marks and certainly changing the
way corporate America thinks about its relationship with the government.
(26:26):
Shelly Banjo, Ian King, thank you so much, thank you,
thank you, thanks for listening to trump Andomics from Bloomberg.
It was hosted by me Stephanie Flanders and I was
joined this week by Bloomberg's Shelley Banjo and Ian King.
Trump Andomics was produced by Summer Sadi and Moses and
Dam with help from Amy Keen and special thanks this
(26:47):
week to Magnus Henrickson. Sound design is by Blake Maples
and Kelly Garry and Sage Bowman is Bloomberg's head of Podcasts.
To help others find Trump and nomics. Please rate and
review it highly Where for you listen
Bloomberg Audio Studios, podcasts, radio news. In the case of
Intel is interesting, but I hope I'm going to have
many more cases like it.
Speaker 2 (00:12):
You know, you do have stupid people say, oh, that's
a shame.
Speaker 1 (00:15):
It's not a shame.
Speaker 2 (00:15):
It's called business.
Speaker 3 (00:29):
I'm Stephanie Flanders, head of Government and Economics at Bloomberg,
and this is trump Andomics, the podcast that looks at
the economic world of Donald Trump, how he's already shaped
the global economy, and what on earth is going to
happen next. This week, we're sparing a thought for the
boardrooms of corporate America and how trump Andomics is working
out for them. Donald Trump has involved himself more directly
(00:53):
in American businesses on a wider range of issues than
any president in living memory. He weighs in on social media,
in the courts, and especially in the Oval office. So
is it just Trump being Trump? Or will history also
say this was the point where the US embraced the
kind of state run capitalism previously associated with Moscow or Beijing.
(01:16):
Just a few examples to introduce the thought. In late August,
you'll remember, the President sealed the deal that gave the
US government a nearly ten percent stake in Intel.
Speaker 2 (01:26):
Corps, celebrating that he got it the zero what this
means future?
Speaker 3 (01:30):
Shortly after calling on social media for the CEO of
that semiconductor company to resign, the President's banned American chipmakers
from exporting chips to China, only to change his mind
a few months later after the CEO of the chip
giant in Vidia, paid the President to visit and agreed
to pay the government a fifteen percent tax on those
(01:50):
chip sales.
Speaker 2 (01:51):
Of the revenues that they make from those sales into
the China market of the age twenty when it comes
to Nvidia or AMD's equivalent once they start shipping those.
Speaker 3 (02:00):
Something we don't yet know is even constitutional. America's commander
in chief has also weighed in on everything from changed
restaurant logos and clothing commercials causing stocks to jump or
sink on the basis of late night truth social posts.
Speaker 1 (02:15):
American Eagle shows are up twenty four percent right now,
and this is after President Donald Trump came out in
support of the controversial ad with Sidney Sweeney in it.
Speaker 3 (02:26):
And just this week, for example, he weighed in on
a long standing feature of US corporate life, saying apropos
of nothing in particular that companies should have to report
on a six month basis their earnings, not quarterly. So
ow are CEO's handling all of this? What is the
Trump playbook for them? And where are all of those
interventions taking corporate America American capitalism. Well we're going to
(02:50):
get into that right now with Shelley Banjo, Bloomberg's Managing
editor for Global Business in America's who spends at least
part of her time talking to chief executives who come
through our doors in New York. Shelley, great to have.
Speaker 1 (03:02):
You, Thanks for having me, And from.
Speaker 3 (03:04):
San Francisco, Ian King, a reporter who covers semiconductors, hardware,
and telecoms for US at Bloomberg. Thanks Ian, follow that, Shelley.
I noticed one of our esteemed colleagues, West Kasova wrote
this week a brilliant CEO guide to getting what you
(03:25):
want out of Trump. I mean, if someone was trying
to devise MBA courses now on handling this second term
of President Donald Trump, you know, seven months in, what
do you think will be in that kind of class?
Speaker 1 (03:40):
I think the first thing is do not come empty handed.
You know Wes's wonderful story, as you point out, talks
about this trophy that Tim Cook has prepared for him.
We had the Coca Cola CEO come in with a
personalized bottle for Trump and we can sort of mark
this or laugh, but the indication is I am here
to kiss the ring and I want to start that
(04:02):
from the outset, the way you would go and visit royalty.
Speaker 3 (04:05):
We've been talking about this over the last few days.
It's not just these sort of you know, public times
where you go to the White House and you lobby.
It's also just the sort of never quite knowing what's
going to happen next.
Speaker 1 (04:18):
Right exactly, because you can understand what Trump might be
after on you know, sort of the policies that he's into,
but as a CEO, you're sort of living in fear
that you're going to be the subject of a truth
social post. And that is something that businesses and CEOs
are are terrified of because it's very hard to plan for.
(04:40):
You can't really come up with a business case of
what to do when this happens. The one CEO we
had in last week told us that they actually did
do a simulation with a board of what happens when
you are the subject of a true social post. So
it's a conversation they're having at the board level.
Speaker 3 (04:58):
And it's funny because I know people who do do
some of these trainings. And obviously our social media is
not a new thing, and I've heard sort of government
relations and others talk about how does one handle it
if there's a Twitter storm over something. You know, airlines
deal with it all the time when you've got you know,
some prominent person stuck in a long line all their
(05:18):
plane gets delayed. But I suspect, you know, there's a
whole different set of rules if you're dealing with the
commander in chief.
Speaker 1 (05:24):
Absolutely, and it moves market. We saw with the Cracker
Barrel example that they you know, spent a lot of
time putting out a new logo didn't look all that
you know, controversial at the time. Cracker Barrel, the famous
US restaurant chain, faces and tense.
Speaker 2 (05:39):
Backlash after it tried to swap its own logo for
a sleek new design and.
Speaker 1 (05:44):
All of a sudden, it's sort of you know, stirred
up a storm saying, you know, why are you erasing
our history? And so there was a huge backlash, and
all of a sudden, you know, Trump is weighing and
those stock prices going down, and this CEO has to
make decision. Am I going to stand up for this?
Am I going to you know, fall back? And in
the end they cave. They said, you know, we're going
(06:06):
to go We're going to go back to how it was.
We're sorry. And if you think about that exercise, you're
sitting there just developing a brand logo, you don't necessarily think, okay, well,
what is the president going to think about this rand logo?
Speaker 3 (06:20):
We talk about audience of one, yeah.
Speaker 1 (06:22):
And now and now you do. And so we had
the Alaska Airline CEO in a couple of days ago,
and I asked him about this because they also changed
their logo recently, and he said, it's not an excuse
to say like we didn't think about it anymore. Like
we live in this world where you have to think
about that. You have to think what's going to happen
if you know, the social media folks, if the president,
(06:44):
if whoever, is going to come out against you, what
is your plan? And the anxiety that he said he
was feeling as he was changing his logo.
Speaker 3 (06:51):
So Ian We do know that the president likes doing
big deals and talking to big companies who then make
promises with lots of zeros attached. When it comes to
investment in other things. Obviously the big tech giants, the
likes of Google and Apple, you know, there's been a
lot of that in that area. But also in the
area that you cover, we're obviously thinking more and more
(07:13):
these days about AI and the semiconductor chips that go
into AI. You know, how has the world changed just
for the companies and that that you cover in the
last seven months.
Speaker 2 (07:24):
I mean it had already changed. We inherited an environment
from the Biden administration where there was a unique level
of government interest, whether that government was in Washington or Beijing.
The industry had become a tool of geopolitics. What's changed
under the current president is the predictability. And on the
one hand, the CEOs of the companies that I believe
(07:48):
they've cracked the code. You know, they believe that sort
of flattery gets you everywhere. They have a certain pattern
in terms of behavior that they exhibit. Now they will
go to the White House, they will come out of
the security gains, they'll look into a TV camera and
they'll say the following words, which is, are we are
so lucky to have this president who is uniquely interested
in our industry, And then they will quote some large
(08:10):
dollar number which frankly, quite often isn't really related to
anything concrete. And that pattern appears to help them in
their relationships and allow them to open doors to other things.
But on the flip side of that, as Shelley said,
there's an element of unpredictability that has been introduced in
terms of we are one social media posting away from
(08:32):
a massive intervention in the fate of our company, in
our company's earnings and our company's profits, and I think
that is definitely taking its toll.
Speaker 3 (08:41):
I mean, we obviously saw the kind of embarrassing example
of that. The off mic moment was when Mark Zuckerberg
had a Meta was kind of caught after one of
these sessions in the White House where he'd announced a
big number for what Meta was going to invest, and
then he was heard to be saying, oh, to the President,
I wasn't sure what number to use. I hope that
was all right right now, which sort of goes to
(09:09):
this choreography that people are engaging with and not necessarily
a great attention to what the actual number is, at
least from from a business standpoint. But I guess the
most extreme example ian for those who didn't haven't followed
every turn, was where we ended up, where we started
and where we ended up with the chief exec of Intel, Bhutan.
(09:30):
So just talk us through what happened to him, because
there was a sudden true social post about him saying
he must be conflicted and must resign, and then the
President said there is no other solution to this problem,
but then it turned out that there was.
Speaker 2 (09:43):
Yeah, this was an alarming moment I think in corporate history.
This gentleman was brought in to rescue Intel. He is
of you know, he's originally Malaysia, he's an American citizen.
Now he's of Chinese background, and there was a political
so of campaign to try to undermine him because of
his investment links to China, links that we don't even
(10:06):
know exist anymore. But it was certainly historically was a case.
And what happens as the President saw that seized upon
it and immediately jumped to the conclusion that Bhutan, the
CEO of Intel, a publicly traded company, was in fact
conflicted and should step down. That was a call he
made a week later. Lit Bhutan is in the White House.
Everything is great, and this chipsacked money that had been
(10:29):
assigned to Intel under the Biden administration is suddenly switched
into shareholding stake for the US government in Intel. So
I mean, how do you follow that, how do you
plan for that? How do you run a company with
that kind of set of possibilities in the air. And
the answer is you don't. You just react, And that's
(10:49):
not a way to run a company.
Speaker 3 (10:51):
There's been some Republicans and certainly some sort of pro
market conservative commentator who've raised both eyebrows at that deal.
But I think it's very striking how little opposition there's
been to it or sort of concerns about it. And
I guess one has to just for completeness. I mean
(11:13):
in video is the other area, the other big deal
that the President has made, which financially is probably even
more significant for the company We're talking about much bigger numbers,
but also could be quite significant strategically for the US.
Speaker 2 (11:28):
Again, it's geopolitics influencing the US policy. The underlying desire
is to prevent China from getting access to advanced semiconductors,
because we believe in the US that is against national
security interests. But somehow that's become negotiable. Somehow that has
become the subject of a real estate deal. And if
(11:49):
in Video and AMD, which is a smaller company doing
roughly the same thing, are allowed to send a certain
type of chip to the China, now a reduced capability chip,
then they can do that, but with the provider that
they give the US government effectively a kickback fifteen percent
of that and as a whole, as you alluded to
us or concern about whether this is even legal. We
(12:11):
spoke with the CFO of Nvidia, so this is the
world's largest publicly traded corporation. We asked her about how
are you going to pay this fifteen percent and she said,
I'm not there's no rules, there's nothing that. Effectively, what
she said was, this is illegal. If I do this,
I'm breaching my fiduciary duty. Can't do it until they
give me a set of rules to do it. Those
rules have not emerged, so right now it's not going
(12:33):
to happen.
Speaker 3 (12:43):
Shelly, I do want to get back to you because
something that strikes me when you think about the kind
of training that anyone who gets to the top of
a company will have had, either implicitly or explicitly. I
was sort of thinking about it as before we started this,
the implicit messaging has always been you want to do
everything you can to ingratiate yourself with the government whatever
(13:04):
country you are, but without it being evident and without
necessarily calling attention or raising any question marks. Whereas it
seems that this is the opposite in this administration. Whatever
you do to ingratiate yourself has to be completely open
and ideally you know, in the Oval Office with cameras rolling.
That is quite a shift, And I just wonder, you know,
(13:26):
are there even sort of legal worries in these boardrooms
about needing to really very publicly engage in sort of
quid pro quos with the federal government.
Speaker 1 (13:39):
Yeah. I mean the most striking example of that has
obviously been Elon Musk and Tesla and sort of how
close you get to the president where you're literally in
the White House making and helping informing these decisions. And
we saw the impact on Tesla people stopped buying Tesla cars.
You can sort of negotiate how much of that had
(14:02):
to do with his association with Trump, how much it
had to do with other things. But you know, even
we had the board chair of Tesla into Bloomberg this
or this last week, and you know, even she said,
as part of the negotiations with Musk for his pay package,
like we would like to see him focus on Tesla,
And so, you know, it does sort of raise the
(14:23):
question of, you know, how much is it you're just
doing your job as CEO includes now managing the emotions
and the whims of the US President, and how close
is too close and how far is too far? I mean,
you haven't really seen a consumer backlash quite like at
Tesla at other companies, and so I think some Americans,
(14:46):
consumers and probably consumers around the world are sort of
inerrod to it a little bit. They understand that this
is part of the job. I think it's also a
question of are people really going to do what they
say that they're going to do, because I think a
hallmark of the Trump press tency is We're throwing a
lot of big numbers at you, a lot of big stuff,
a lot of big threats. You don't know which ones
are gonna come true. This week, you had the TikTok
(15:09):
deal come back into focus. I remember when I was
living in Hong Kong in twenty eighteen, twenty nineteen, twenty twenty,
you know, the first Trump presidency, we were talking about this,
and so, you know, fast forward to twenty twenty five,
we're still talking about the same thing that Tramp was
talking about. We're still talking about tariffs. Like there's some
(15:29):
things that just haven't happened yet. So how do you know,
as the CEO, which ones to take seriously and which
ones you don't? And I think the answer has become
as Ian sort of alluded to, like you have to
take them all seriously. But I don't know, you know,
how much do consumers really get impacted by that?
Speaker 3 (15:43):
You know, A part of the story of American capitalism
was always sort of slightly economical with the truth. You know,
there has always been an enormous amount of subsidies and lobbying.
When I worked in the US Treasury, you know, having
been brought up in the UK, the half from American,
I was sometimes surprised by the sort of assumption that businesses,
(16:06):
the sort of the closeness of the lobbying and the
closeness of the business relationships was certainly something that was
different from the UK and seemed to be part of
the American tradition that you'd have businesses weighing in very
directly on you know, deals that were being done and
other things, and there was no question of any wrongdoing.
It was just like the way things happened. So, I mean,
given that, is it surprising that you haven't had more
(16:28):
businesses sort of say, hang on a minute, what kind
of capitalism is this?
Speaker 1 (16:33):
For sure? And we're seeing that right now build up
all these companies, build up their presences in Washington. They're
hiring the firms that are aligned with Trump and people
who had come out of the Trump one point zero
administration who have now started out their own lobbying firms,
and they're coming out and saying that outright that we're
not hiding. This is what it means to be a
good CEO in this moment in twenty twenty five. And
(16:54):
so is our companies getting closer with the US government
or are the administration's goals Probably I'm not sure if
any of the consumers or investors seemed to care at
this moment. So far, we haven't seen in some sort
of big outcry or anything like that.
Speaker 3 (17:10):
I guess so far we've mainly seen stock prices go
up rather than down, which makes a difference exactly Ian
if we just think about the potential long term implications
of this. And I've seen that there's been a debate
around this, some saying that America is embracing for better
or worse and more of a kind of Chinese style
state run capitalism. Other people I saw Michael Strain, the
(17:33):
director of Economic policy Studies at the American Enterprise Institute, said,
you know, this is Trump being Trump. This is opportunism
and a sort of thrill about having deals being done
from Donald Trump. It's not a big ideological shift. I mean,
even those two examples that you and I just talked about,
taking a strategic share in an industry, a US company
(17:56):
that makes something chips that we know is going to
be sort of central to the future of the global economy,
it doesn't seem of all the things that Donald Trump's doing,
that didn't seem to me like the craziest thing. And
it certainly is no different from some countries you know
that aren't China, like France, for example.
Speaker 2 (18:13):
Yeah, I mean when you unpack that there are a
number of elements which I think talk to your point here.
The first point is that he inherited and an apparatus
called the Chips Act from the Biden administration, and that
was the kind of Sauz Korea and Taiwanese development, state
directed capital development. Hey, we will give you money as
a company if you do this certain type of thing.
(18:35):
And that was the situation that Intel and a lot
of its peers were in. What Trump said all along
was I don't like this. This isn't market capitalism, this
isn't the kind of thing that the US government should
be doing. What we should do here is and then
turn this into a loan. So what there was a
lot of to and fro about this, But what he
did was turn it into basically taking a stake and
(18:56):
tried to sell that to his constituents, the US tax
players as hey, this is a win for us. We've
got something. This is a transaction. This is back to
that real estate deal mentality. So it was a complicated
situation there. The other side of it is the geopolitical thing.
There's one through line through the first Trump administration, the
Baden administration, and the current Trump administration, which is the
(19:19):
concern the geopolitical rivalry with China, and that is a constant,
that is something which has only increased. The only wrinkle
has been hold on them and it maybe we'll let
in video them, We'll let AMD give the Chinese some
of these old type chips, and that's the only wrinkle.
Speaker 3 (19:37):
Well, and you say it's the only wrinkle. I mean,
we've discussed it in the past on this show with
from of our geoeconomists, at least one of whom was
very heavily involved in the Chips Act in the Biden
National Security Council. And I think that was the one
that everyone has found very hard to square. If you
think about the objectives of the first Trump administration highlighting
(19:58):
the risk of China, the way that Biden's administration kind
of institutionalized that and to some extent developed it in
the form of the Chips Act and some of the
export controls that they put on, and the way that
continued in the first few months of the Trump administration
with the initial ban on those chip sales. The reversal
of that, you might say, just for the sake of
(20:19):
a few bucks for the federal government, That's the one
that people find hard to square in the kind of
policy community. Is that also true in Silicon Valley or
they just think, oh great.
Speaker 2 (20:29):
No, I think it's back to what we were talking
about earlier, which is the ability of CEOs to say
the right thing to appear at the right time. And
what has effectively happened here is that the Trump administration
has adopted the language and the thinking of In Video Corporation.
Here in Video has said, Look, these tips are so
old now they don't matter. We're not even sure that
(20:50):
the Chinese want them. Why can't we just send them
there anyway and get that bit of money that we'll
get for them, and we'll use that money to make
America great again by paying for our Otherwise, if we
don't do this, we't have any presence in China. They
do their own thing, and we've lost completely. And they've
constructed this logical framework that kind of has the cogs
(21:10):
have mashed with some of the geopolitical concerns, some of
the free market concerns that exist around this intervention and
made it work. And whether it's Howard Lutnik or others
have just decided to adopt this and allow this to happen,
and then you have the man at the top who said, well,
give me fifteen percent and you're okay. That I think,
and the way it was done has caused concern, But
(21:33):
the fundamental logic, I think a lot of the even
the hawks, are like, well, okay, I can see.
Speaker 3 (21:38):
That, Shelley. I wonder whether anyone has observed that to you.
I mean, there's a lot of deals that aren't really deals.
They're not deals in the kind of corporate sense of oh,
there's a bit of paper or many many pieces of
paper and lawyers in the room and kind of clear terms.
Sometimes they're unwritten. Sometimes we find in some of the
trade quote unquote deals that in the case of Vietnam,
(22:00):
for example, there was a profound disagreement about what the
actual deal was after it was supposed to have been done.
That is part of the issue, isn't it that this
is these deals are sort of semi deals until the
next deal.
Speaker 1 (22:10):
Yeah, they're squishy. And I think going back to your
original question of what is chapter one, two, three, four
of the Trump playbook, coming up with a big number
that can't necessarily be tracked and promising it to the
Trump administration probably deserves a chapter in that playbook, because
you know, you look at a company like Hyundai, you
look at these drug makers Johnson and Johnson. They're all
(22:32):
coming up with these numbers and they're putting it forth
and I'm sure that they can justify it. But some
of these numbers account for factories they built five years ago,
inspired by Trump, maybe in Trump one point I zero.
So they're squishy numbers, they're squishy deals. The examples that
Ian site are a little bit more specific, but a
lot of these manufacturing commitments that these companies have done,
(22:54):
and these ribbon cutting type scenarios are not some things
that you can necessarily try and really hold my accountable.
Speaker 2 (23:02):
Shit.
Speaker 3 (23:03):
I don't want to put you on the spot, but
just before we end, it occurs to me that before
you came back to New York and when you and
I first met in Hong Kong, and we tend to
think that this is more of a quote unquote Asian
way of doing things, you know, to have more of
these kind of backroom deals and state government sort of
strategic involvement. Does it feel similar or does it feel
like something completely unique to Donald Trump.
Speaker 1 (23:26):
It's such astute question because when I was sort of
reflecting on this idea of is this just the now,
Is this the CEO saying I need to get through this,
I need to move on to the next thing, or
is there lasting impact? I think I came to the
conclusion that the lasting impact is that the window can shift,
and that you know, if Trump pushes the envelope. Now,
(23:47):
mixing my metaphors a little bit, but if Trump push
the pushes on the pushes the one you know right exactly,
then then it sort of like opens it up for
anything to happen. And that's sort of what had happened
with China in so many different ways over the last
you know, number of decades, right, You start to normalize
things little by little by little by little, and then
(24:09):
you look back and you see, wow, this actually this
whole thing has created monumental shift.
Speaker 3 (24:15):
I wonder ian we think of the tech world now
and semiconductors in particular, as being something that is moving
incredibly fast and potentially decisions made now could be affecting,
you know, the whole path of AI as it sort
of takes hold of our economies and our societies. Do
you think there are some lasting shifts here or is
(24:38):
it going to be a sort of a kind of
Trumpian fever dream.
Speaker 2 (24:42):
No. I think lasting shifts are in the all thing,
that there is an absolute policy in place, whether it's
in Beijing, whether it's in Washington, whether it's in this
whole or Taipei, and that structuring things in a way
that those economies and those sets of capabilities will succeed.
I lived in career for eleven years. Korean companies, they
succeeded because the government decided that semiconductors were important. Taiwan
(25:09):
t SMC, they succeeded partially because taipaid made that a
national priority. That's happening in the US, and that's unprecedented
obviously in many respects for the US. How it's done,
whether it's done in an organized fashion, whether it's done
in a logical fashion and a consistent fashion, to your point,
is really important because guess what, the chips that are
(25:29):
being designed today, the TIC chip technology that is being
designed today, won't really be relevant for at least two, three, four,
five years. And even though the industry is moving very quickly,
you are basically plotting your path towards success or disaster
right now. So again, this mixture of countervailing forces on
(25:50):
the one hand, yes, interest is good, Yes, capital is good. Yes,
using restrictions is good. On the flip side of it,
inconsistency is also kind of an anathem so the chip industry,
because it's such a difficult thing to do and it
plays out over such a long period.
Speaker 3 (26:06):
Well, I think that is the point we've often reached
in these conversations. You know, in principle, quite a lot
happening here that could well make sense for America, for
the world, but the way it's being done and the
exact decisions raising some question marks and certainly changing the
way corporate America thinks about its relationship with the government.
(26:26):
Shelly Banjo, Ian King, thank you so much, thank you,
thank you, thanks for listening to trump Andomics from Bloomberg.
It was hosted by me Stephanie Flanders and I was
joined this week by Bloomberg's Shelley Banjo and Ian King.
Trump Andomics was produced by Summer Sadi and Moses and
Dam with help from Amy Keen and special thanks this
(26:47):
week to Magnus Henrickson. Sound design is by Blake Maples
and Kelly Garry and Sage Bowman is Bloomberg's head of Podcasts.
To help others find Trump and nomics. Please rate and
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