NOV. 1, 2016 NOV. 1, 2019
SOURCE: S&P GLOBAL
–50%
0
50
100
150%
–29.4%
S&P 500
PRICE CHANGE IN U.S. STEEL STOCK SINCE NOV. 2016
SOURCE: THE CONFERENCE BOARD
CEO CONFIDENCE
Q4, 2016 Q1, 2018 Q3, 2019
34
0
20
40
60
60
FORTUNE.COM // DECEMBER 2019
WITHIN MOMENTS OF DONALD TRUMP’S upset victory in the 2016 elec-
tion, investors began stampeding into the shares of America’s steel-
makers. After all, this was a business he had explicitly pledged to
rescue. “Your steel industry—we’re bringing it back, bringing it back,
folks!” he had promised a wildly cheering crowd in Pittsburgh the
previous April. So when trading opened the morning after election
day, the buy orders were stacked high and prices began to rocket.
By week’s end the S&P 500 was up 2%, but Steel Dynamics was up
13%, Nucor up 14%, Pittsburgh’s own U.S. Steel up 23%. For a Rust
Belt industry in distress, deliverance had apparently come.
Fast-forward a few months, to when Trump imposed tariffs on
imported steel and steelmaker stock prices surged even higher,
at least for a while. Today the shares of all of America’s major
steelmakers are trading not just below their 2018 highs but also
below where they were before Trump’s election. U.S. Steel, which
worked hard behind the scenes to help fashion the tariffs, is worth
nearly one-third less than its value on Election Day. Bringing back
the industry turned out to be harder than Trump, steel company
executives, or investors ever imagined.
American steel is a particularly dramatic microcosm of U.S.
business in nearly three years of the Trump presidency—an era
that began full of promise and was initially a welcome boon for
major sectors but that has become increasingly detrimental for
many. Trump has been virulently criticized for a wide range of
things, but, as the nation focuses on impeachment, Fortune has
chosen to focus solely on his economic and business record. On
that dimension, the one constant of his tenure so far has been
lurching inconsistency, creating an environment of unprecedented
uncertainty that has become a significant business problem in it-
self. It’s hard to believe, but despite several seemingly pro-business
policies and a few major early successes, the first career-business-
man President has become bad for business.
But wait—how can today’s environment be bad for business?
Stocks have been hitting new record highs. Inflation is low.
Interest rates are extraordinarily low. Though the labor market
is ultra-tight, more workers are reentering the labor force in
response, and consumers have more money to spend. Isn’t this
close to business nirvana?
It ought to be, but look closer. Sentiment in
some previously friendly quarters has turned
powerfully against Trump. CEO confidence,
which leapt in Trump’s early days, has since
plunged to levels not seen since the dark-
est days of the financial crisis in 2009. “The
Trump administration lost the C-suite in
2018,” says Douglas Holtz-Eakin, a Republi-
can who ran the Congressional Budget Office
from 2003 through 2005 and now heads
the American Action Forum, a center-right
think tank. “I think the cause is mainly trade.”
(Fortune interviewed several corporate execu-
tives who largely shared Holtz-Eakin’s view
but were wary of saying so on the record. The
White House, for its part, did not respond to
several requests for comment.)
Small-business owners rejoiced when
Trump won, but their optimism, as surveyed
by the National Federation of Independent
w
WHY TRUMP IS BAD FOR BUSINESS
