Business and politics: where is the line?

What is happening in the United States is impacting many areas, but also those affecting the business world.

The Trump administration is using its power to force the will of companies. One example is the acquisition of Chinese assets in the Panama Canal by a consortium of American companies. The transaction has now been halted by Chinese authorities, but within weeks the new president's wishes were fulfilled. Coercive actions have also affected the most important law firms, sometimes in retaliation for matters from his first term, but also to prevent these firms from taking legal action to halt administrative actions of questionable constitutionality.

President Trump is using executive orders to make decisions that fall under the legislative branch, including the elimination of independent agencies and bodies that fight corruption and abuse of power. He is also ignoring opposing court rulings in an attempt to take legal disputes to the highest court, a Supreme Court he has shaped to his liking over the years.

Despite the evident weakening of the rule of law and the serious and growing conflicts of interest, condescending and even understanding voices can be heard from the business world. It is argued that public administration and regulations had grown excessively and needed to be cut back. And a change of course in social and cultural policies was also necessary. According to this point of view, Trump's methods are not optimal, but the direction is right, and results will eventually come.

However, methods matter. Not because of manners, but because of something fundamental to the survival of liberal democracy: to prevent the arbitrary use of power.

But what should be the attitude of companies when a political change as important as the one we are experiencing in the US occurs? And, in particular, what should listed companies do? Do they owe it to their shareholders and should they make decisions aimed at preserving the company's stock market listing? Or should they be guided by broader considerations linked to the general interest?

From the day Trump took office, we saw how the leaders of the big technology companies were getting closer. Was it because they believed Trump would deregulate the sector and put pressure on Europe? Or was it that, knowing the new president's temperament, they believed it was best for their shareholders to get closer to him, since otherwise they could get burned?

We have also seen how prominent American companies (Target, McDonald's, and Meta, among others) have quickly reversed their diversity, environmental, and inclusion policies. Some have simply withdrawn mentions of these issues in their annual reports, but others have explicitly changed their objectives. Did they never believe in these policies and are now taking advantage of other media and political winds blowing? Or have they done so out of fear of the new administration's reaction?

If the changes, as it seems, are being made in response to threats from the Trump administration, it would be a very worrying trend. In a few months, the United States would cease to be a country in which administrative decisions are made by a civil service body and independent public agencies according to criteria of neutrality and non-discrimination. And it would become a state controlled by a group of people who arbitrarily use the enormous power of the administration to consolidate their political power, for their own benefit and that of a support network of friendly companies. Another example of what is known as crony capitalism, especially worrying when it affects the world's largest economy.

Businesses must have clear ideas. Not everything is worthwhile to achieve a business-friendly environment. Absolutely not! Deregulation and low taxes are legitimate political objectives, as is corporate policies that take into account dominant political and social trends. But everything has a limit, and businesses must always defend the rule of law, the separation of powers, and the foundations of liberal democracy. These are fundamental principles for the political freedom of individuals, but also for guaranteeing free competition and business freedom.