Taco FTW

Rob Armstrong (0:06)

Pushkin. Just two days ago, in this very studio, we were talking about whether Trump's designs on the island of Greenland were going to be the straw that broke the back of the global economic system. Two days later, we're in a very different place. Having said, there was no going back, Trump has gone back on Greenland and served the world a huge Greenlandish taco. This is Unhedged, the markets and finance podcast from the Financial Times in Pushkin. I am Rob Armstrong, coming to you from Unhedged World Headquarters in New York City, where we are awaiting Big Weekend Snowstorm. Today on the show, is the strategy for dealing with Trump as simple as strength? Joining me today is the cleverest man on Wall Street, the editor of the Lex column, John Foley. John, what do you think? Do we have the blueprint for corporate strategy in the age of Trump?

John Foley (1:18)

Yeah, it does look that way, doesn't it? Europe was pretty unified in resisting this idea that it was going to give Greenland over, and that in collaboration with some market moves that might have spooked the president a little bit, seemed to have done the trick.

Rob Armstrong (1:34)

Trump meets strength. He tacos, taco of course, standing for Trump always chickens out. And it's only when he is met with weakness that he follows through, and you get another acronym, FAFO, fool around and find out.

John Foley (1:54)

Is that what the F is? The first F?

Rob Armstrong (1:56)

No, it's not what the first F is.

John Foley (1:57)

Okay, just checking. I've been thinking about this a lot because I've been trying to weigh up what the benefits and risks of sucking up to Trump or not sucking up to him are. And there aren't that many people who have stood up to him in a big way at all that you can measure this against. But certainly there's not any real evidence that you lose by sticking up for yourself, I think. It's hard to identify specific losers from not doing what Trump says. I think a great example of this is Jamie Dimon at JPMorgan, right, who runs the biggest bank in the world. He's mostly towed the line on stuff that Trump has said, but he's also been quite outspoken when he doesn't agree with him.

And recently, Trump said he was going to cap credit card fees at 10%. That's a big deal for JPMorgan, because I think six of its loans are credit cards. And that cap hasn't happened. And Jamie Dimon hasn't yet been punished for saying it would be a disaster. And by the way, Trump has today dropped a lawsuit against Chase and Jamie Dimon, saying that the bank basically closed his and his family's accounts improperly after January the 6th and he wants $5 billion for that. But JPMorgan stock today is up and the market seems to agree that this is not going to be a big problem for them.

Rob Armstrong (3:08)

I will also note to you, John, and I think this is important, that JPMorgan established this, I forget what it's called, like the resilience investment, something or other. And it's some number of equity dollars of JPMorgan's investing in very Trumpy kind of things, on shoring, defense, et cetera, et cetera. And this looks to me like a blatant sop to the president to keep him off your back.

John Foley (3:36)

Might also be good business, though.

Rob Armstrong (3:38)

I'm not saying it's not worth it. I'm addressing your question, which is, does this stuff pay?

John Foley (3:44)

Yeah, and in either direction, I think the answer is no.

Rob Armstrong (3:46)

I mean, let me give you another example. How many people are gonna watch Amazon's big Melania documentary? I mean, focusing on companies now and company strategy, does corporate butt kissing work?

John Foley (4:04)

I'm not sure it does. Amazon is a great example. Let's see what happens as a result of this Melania doc. And how many people pay to see it at the cinema.

Rob Armstrong (4:14)

Yes.

John Foley (4:14)

I probably won't be doing that versus watch it presumably for free. Or don't watch it at all.

Rob Armstrong (4:22)

Or, and is it worth it for them even if nobody watches it? Because they've thrown a bone to the president in the White House.

John Foley (4:27)

And I think the answer again is no, if you think that because Trump's memory seems to be short, he will say good things about an industry or a company, but then he'll sort of quickly U-turn or he'll do something that gives you the opposite result. So the oil companies have found this to their cost, right? Some oil companies have, I don't want to say sucked up to Trump, but they certainly appeased him. Chevron is a great example of this. Chevron was the first one to start talking about the Gulf of America instead of the Gulf of Mexico. Exxon took a very different stance.