CEOs are continuing to hold an upbeat view of the future, if their initial reaction to Donald Trump’s inauguration is anything to go by—though the mass public demonstrations that followed a speech that was heavily laden with protectionist rhetoric have given them some causes for concern.
Business is excited at the prospect of lower taxes and softer regulation promised by the president, who gave no indication on Friday that such pledges were on the backburner. But he didn’t talk much about pushing them forward either, instead focusing most of his speech on protectionism—a feature of his agenda that doesn’t sit as comfortably with CEOs fearful of any resultant increase in labor and product prices.
“We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs,” Trump said. “Protection will lead to great prosperity and strength.”
There was some mention of upping spending on national infrastructure, an idea also welcomed by the business community. But about all Trump had to say about tax reform was: “Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families.”
The S&P 500 stock market index reduced earlier gains following Trump’s speech, but still finished ahead for the day.
JPMorgan Chase CEO Jamie Dimon, in his capacity as chairman of lobby group Business Roundtable, said corporate America looked forward to working with the new administration to pursue a “robust growth agenda” and the creation of “high-wage” jobs.
“Americans can only benefit if we modernize our tax system, take a smarter approach toward regulation and invest in infrastructure,” he said after the inauguration had taken place.
His views mirrored the upbeat comments of other CEOs in the lead up to the inauguration. “It felt to me like there was an inflection point after the election for business demand,” United Continental president Scott Kirby said while handing down quarterly results on Tuesday.
Shortly after the inauguration speech, former Wells Fargo CEO Dick Kovacevich said Trump’s plans to significantly reduce regulations and taxes could spur at least three interest rate rises this year. “All of those things are very, very favorable to the earnings of financial institutions,” Kovacevich said
To be sure, the continuing risks to business posed by the still-divisive nature of the political environment were laid bare for ride-sharing company Uber Technologies. On Friday, three or four dozen protesters chained themselves to the doors of the company’s San Francisco headquarters, preventing workers from entering. They were angry that CEO Travis Kalanick had joined Trump’s economic advisory council, with some of them wielding signs reading “Uber collaborates with Trump”. The protest eventually fizzled out after police reportedly made more than a dozen arrests.
“As a company, we’re committed to working with government on issues that affect riders, drivers and the cities where we operate,” Uber said. “Just as we worked with the Obama administration, we’ll work with the Trump administration, too.”
Uncertainty over how and when Trump’s policy plans will take shape was raised by Patrick Ottensmeyer, the CEO of Kansas City Southern. The railroad operator has been hurt by a weakening Mexican peso and certainly wouldn’t welcome any disruption to the flow of goods across the Mexican border. “Obviously, the political and economic uncertainty is probably first and foremost on most of our minds, and the irony of us reporting earnings on the Inauguration Day of the 45th President is not entirely lost on us,” Ottensmeyer told analysts.