C Gopinath

Being Trump’s pal

C Gopinath | Updated on July 17, 2018 Published on July 17, 2018

It’s a relationship that can sour sans warning

In trade and foreign policy, the US President has shown that allies pay a high price to remain friends. When it comes to business, the story may not be very different.

If you want to be in the President’s good books, you not only have to cheer him, but keep doing it. And Anthony Pratt knows how. Having made money running Visy Industries, a packaging and recycling business in Australia, the Pratt family launched privately-owned Pratt Industries in the US in the late 1980s.

The company reportedly operates in over 28 states, employing about 5,800 people for making pulp, board, and corrugated boxes. The boxes are touted as from recycled materials. In today’s era, recycled means green and with everyone buying everything online, the demand for boxes has been growing through the roof.

But Pratt is not your quiet self-effacing businessman. He has been taking out several full page ads with his pictures in them in major newspapers in the country praising the policies of the Trump administration. A recent one proclaims that beef and dairy exports have increased by 16 per cent (presumably packed in Pratt’s boxes) and favourably quotes the government’s Agriculture Secretary.

Pratt Industries is a Trump cheerleader. Pratt promised Trump in a public event that he would invest $2 billion (about ₹13,600 crore) and create 5,000 new jobs. Not being in the government contracting business, it is not clear what benefit he hopes to get from these full page ads which must cost about $200,000 (about ₹1.36 crore) a pop. Perhaps he just likes the attention.

He got to meet Trump at the latter’s private club Mar-a-Lago in Florida. Vice-President Pence opened one of their factories last year. Trump, reportedly, sent one of those ads back to Pratt with a handwritten thank you message. So all is well right now, but that could change without warning. Just ask Harley-Davidson.

Harley-Davidson, is the ‘all-American’ iconic motorcycle manufacturer. Its riders are known as Hogs, standing for Harley Owners Group. The company identified itself closely with Trump who was projecting an ‘America First’ image and called on him in 2017 soon after his election. The executives, union leaders and their motorcycles showed up on the White House lawns. Pictures were taken and Trump thanked them for building their bikes in America.

Nasty tweets

Then, with the EU raising taxes on motorcycle imports in retaliation to US tariffs on steel and aluminium, Harley found it would not be able to compete in the EU by exporting from the US. So, to remain competitive, they decided to shift some manufacturing to Europe, a decision which invited nasty tweets from the President. ‘A Harley-Davidson should never be built in another country – never!’ he blared. ‘Their employees and customers are already very angry with them. If they move, watch it, it will be the beginning of the end — they surrendered, they quit! The Aura will be gone and they will be taxed like never before!’ Separately, he warned, ‘Harley must know they won’t be able to sell back into US without paying a big tax!’

With experience in the real estate business where he lent his name in exchange for royalties, Trump approaches trade like a mercantilist. His ‘America First’ model praises an Australian who invests in the US and deplores an American company that wants to manufacture overseas.

I would invite Pratt to invest in India. He would fit in very well. He reminds me of a shop in Bengali Market in Delhi where the walls are full of pictures of the owner with leading members of the ruling party. The pictures quickly change when a new party comes to power.

The writer is a professor at Suffolk University, Boston.

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Published on July 17, 2018
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