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In the case of Intel is interesting, but I hope I'm going to have many more cases like it.

You know, you do have stupid people say, oh, that's a shame.

It's not a shame.

It's called business.

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 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.

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.

Corps, celebrating that he got it the zero what this means future?

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 chip sales.

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.

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.

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.

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 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.

You, Thanks for having me, And from.

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 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?

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 from the outset, the way you would go and visit royalty.

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.

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.

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.

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 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.

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.

Backlash after it tried to swap its own logo for a sleek new design and.

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 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?

We talk about audience of one, yeah.

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, 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.

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 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.

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 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 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 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.

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 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.

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.

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 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 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 not a way to run a company.

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 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.

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 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 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 to happen.

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 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, 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.

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 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 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, 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 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 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?

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, 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 businesses sort of say, hang on a minute, what kind of capitalism is this?

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 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.

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 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 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.

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.

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 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 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.

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 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 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.

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 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 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 the fundamental logic, I think a lot of the even the hawks, are like, well, okay, I can see.

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, 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.

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 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, and these ribbon cutting type scenarios are not some things that you can necessarily try and really hold my accountable.

Shit.

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.

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, 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 you look back and you see, wow, this actually this whole thing has created monumental shift.

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 it going to be a sort of a kind of Trumpian fever dream.

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 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 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 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.

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.

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 week to Magnus Henrickson.

Sound design is by Blake Maples and Kelly Garry and Sage Bowman is Bloomberg's head of Podcasts.

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