Trump's trade talk rattles Minnesota corporate leaders

President Donald Trump's repeated vows to punish companies that move jobs overseas have alarmed some top Minnesota executives, who find themselves bracing to see how a brash, unfiltered presidential style could upend cautious corporate decisionmaking in a global economy.

As a candidate and now as president, Trump promised to impose tariffs on companies that move jobs offshore. He has offered unspecified tax advantages for creating new employment in the U.S.

"Globalization has gone a long ways in the last 20 years," said Dave MacLennan, chief executive of Cargill Inc., a food and agricultural producer that is the largest privately held company in the U.S., and which operates in 70 countries. "You can't put that genie back in the bottle."

Trump has shown little reluctance to tiptoe around legacy names in U.S. business that displease him, as in recent days when he blasted Nordstrom for dropping his daughter's products from its department stores.

Critics in some of Minnesota's loftiest executive suites fear the longer-term fallout if Trump takes U.S. trade policy in a protectionist direction.

Although political prospects for the new Republican president's initiatives are not yet clear — many congressional Republicans have traditionally been free traders — they see potentially crippling impacts on Minnesota's global trade-reliant economy if the U.S. becomes isolated from established and emerging markets abroad.

Traditionally reluctant to wade too deeply into politics, chief executives across the country are weighing how publicly and aggressively to react to Trump — particularly his policies that stand to affect their employees and, potentially, bottom lines. Dozens of high-profile technology companies, including Apple, Facebook and Google, signed onto lawsuits filed by states, including Minnesota, that have blocked Trump's travel ban on Muslims from some countries.

MacLennan's comments about Trump, in two recent Star Tribune interviews and at a public appearance in St. Paul, are a break for normally cautious Cargill. MacLennan is navigating uncharted territory as he works to preserve trade agreements crucial to the Minnetonka-based corporation, a position he said he didn't anticipate being in even a month ago.

"Geopolitics are shifting and we are standing at the crossroads of some really important issues for business and for society," MacLennan said in a speech at the University of St. Thomas this month.

Minnesota exports were $20 billion in 2015, the most recent full year for which full data is available. Mexico, which Trump has targeted with promises of a border wall he suggested could be bankrolled with a tax on Mexican imports, is Minnesota's second largest trading partner. Minnesota is home to more than a dozen Fortune 500 companies.

"Global business has operated very much in Minnesota's benefit," said Bill George, a former chief executive of medical device maker Medtronic and now a professor at Harvard Business School. "If we go to America first, this could really harm Minnesota's companies, harm our relationships, our ability to do business in China or Vietnam or Korea because that's where the opportunities are, and that's where a lot of companies have been putting their efforts in."

George, who was Medtronic CEO from 1991 to 2001, predicted that Trump's vow to reward businesses for bringing jobs back to the U.S. "would lead to crony capitalism" by forcing companies to jockey for favor with the White House.

In 2014, Medtronic took advantage of current federal law that allows expansion into other countries by undergoing a much-publicized "inversion" — relocating its corporate headquarters to Ireland and its more favorable tax climate. It's the kind of move that now seems tailor-made for Trump to publicly criticize.

"A Medtronic would never have gotten done today," said the CEO of another Minnesota Fortune 500 company, who declined to have his name printed. "This guy would have just taken them to task for the idea that they're going to move their headquarters and take the American business and let it be done somewhere else."

Charlie Weaver, executive director of the Minnesota Business Partnership, which represents the state's largest companies and has historically aligned politically with Republicans, said that he expects Trump will push for fairer trade agreements. As a candidate, Trump promised to address currency manipulation by China, as well as theft of intellectual property.

"I know that he's not against free trade and our global economy," Weaver said. "What he's against is what he sees as unfair or unbalanced trade."

The Star Tribune granted anonymity to two Minnesota CEOs to speak more freely about potential fallout for their companies. The Minnesota CEOs said they hope to help convince the Trump administration to seek more input from companies and to avoid formulating policies that cut off foreign markets.

"History has not been kind to countries that do this," one executive, whose company stands to be affected by intensifying trade battles, told the Star Tribune. He added that "to build a wall around the country, literally or figuratively, and turn this into a self-reliant economy is going to be very, very harmful."

The executives declined to be named out of worry it would make them or their companies targets for the president, who has frequently done so at political rallies and on his well-used Twitter account.

That was the case the weekend before the election, when Trump made his only Minnesota public appearance as a candidate. During a rally at Minneapolis-St. Paul International Airport, Trump knocked Ford Motor Co. for closing a St. Paul plant in 2011. He rattled off other firms that moved operations outside Minnesota, such as IBM and MoneyGram.

"A Trump administration will stop the jobs from leaving America," Trump said that day. "And we will stop the jobs from leaving Minnesota and we'll stop them immediately."

To be sure, plenty of business leaders have seen things to like about pieces of Trump's agenda, like the prospect of lower corporate tax rates and plans to reduce regulations. When Trump signed executive orders to begin dismantling the Affordable Care Act, the Dow Jones industrial average closed above 20,000 for the first time, which he took credit for.

Trump has already summoned business leaders to the White House, where some raised objections to his executive order barring U.S. entry to citizens of a handful of countries with large Muslim populations. That order is now in legal limbo as a challenge proceeds through the federal courts system, with the administration losing the first few rounds.

The other executive said that Trump's volatile, unpredictable approach is anathema to the way major corporations operate.

"The way the administration is changing the business models on the fly in news conferences, tweeting kind of scenarios, it diminishes the value and respect for the need for a board to work in concert with a management team to understand the implications and to make adjustments," he said.

Ricardo Lopez • 651-925-5044