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Bryant Madden

January 19, 2017

Crisis on the Homefront

The list of companies that have been publicly chastised by President-elect Trump (likely President Trump, by the time you read this) grows by the week. Making good on his “America First” platform, the president-elect has chiefly targeted companies that have – or plan to – outsource jobs and production to foreign companies.

His Twitter tirades have destroyed millions of dollars in market cap for some of the nation’s most respected brands. The threat is so significant that attendees of the annual World Economic Forum in Davos, Switzerland – cleverly described by Reuters as “the high priests of globalization” – have begun laying plans to localize supply chains.

U.S.-based multinational corporations have a new calculus to consider: will increased cost of domestic production outweigh potential sales or market cap losses related to condemnation by the president? If not, relocating supply chains – or at least delaying outsourcing – may be the best option, especially if a Republican Congress helps Trump sweeten the deal with tax incentives.

At the very least, companies must consider implementing a certain amount of economic nationalism into their communications. Informing consumers and politicians about the U.S. impact of business is more important than ever.

When the president can effectively demolish a billion dollars of market cap in a single tweet, effectively communicating a nationalist economic message is an essential crisis-mitigation strategy. However, there may be a more positive benefit as well; as economic populism gains in popularity, local impact will become a competitive point of differentiation.

Donald Trump will be inaugurated as the 45th president tomorrow. It’s time to adjust to the new reality.

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Categories: Crisis
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Posted by: Bryant Madden

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