Small firms take stock of the president at midterm

It’s the two-year anniversary of the Donald J. Trump administration, and the past two months have witnessed an erratic stock market, the return of the House of Representatives to Democratic control, the sentencing of Trump’s former attorney Michael Cohen stemming from special counsel Robert Mueller’s ongoing investigation of the president, and a standoff over the proposed border wall between the US and Mexico, resulting in a record-setting partial government shutdown.

Still, as has been the case through several chaotic episodes over the past two years, the president’s approval rating among likely or registered voters continues to hover around 40%, buoyed by an extremely loyal base.

One constituency that remains fairly solidly in the president’s camp is the managers of small to midsize specialty and fine chemical companies. They head companies that range from family-owned enterprises to specialized divisions of large corporations. A swath of US industry whose voices do not appear prominently in the general press, these executives typically align with the Republican party’s pro-business politics, voting for any candidate who is not a pro-tax, pro-regulation Democrat. Nevertheless, issues such as trade policy and chaos in the distinctly nontraditional Trump administration are causing some of them to rethink their support.

To judge only from December’s annual dinner of the Society of Chemical Manufacturers and Affiliates (SOCMA), a trade association for such firms, all is well for Trump in this sector. A well-attended “fireside chat” before the dinner featured Peter J. Tanous, chairman of Lynx Investment Advisory, and Stephen Moore, founder of the conservative Club for Growth and former chief economist at the Heritage Foundation, both of whom gave the administration high marks. Moore’s laudatory book, Trumponomics, coauthored by economist Arthur Laffer, was handed out and eagerly received at the cocktail reception that followed. And when speaking with C&EN, many executives say they feel something akin to relief with Trump after what they viewed as a period of high taxes and runaway regulation under former president Barack Obama.

“From my perspective, I think Trump’s doing a good job because he’s very matter of fact,” says Michael Kucharski, CEO of the phosgene chemistry specialist VanDeMark. “I think he knows exactly where to draw the line on things, and he knows what his objectives are.”

And those objectives align with Kucharski’s business. He points, for example, to tariffs that he believes are easing competition from Chinese firms. He admits to uneasiness in supporting a president whose lapses of character include highly offensive comments about women and, in the weeks leading up to his election, paying to silence two with whom he allegedly had affairs. “But, frankly, what president hasn’t had conflict?” he asks. “I mean, look at Bill Clinton.”

Others are making an effort to look beyond the mayhem that surrounds Trump’s presidency. “If you watch what he does rather than what he says, he’s working in the best interest of US manufacturers and the US economy,” says Jim DeLisi, CEO of Fanwood Chemical, a marketing services firm. Like Kucharski, DeLisi highlights the topic of China, claiming that Trump’s brinkmanship on trade helps small businesses.

“China has promised to revise and update its trade policies for the last 25 or 30 years, and repeatedly they’ve done nothing,” he says. Conceding that Trump’s approach of imposing trade sanctions lacks finesse, DeLisi applauds a tough stance.

“Something needed to be done,” DeLisi says. “Whether this is the right way to do it or not, I don’t know, but somebody had to draw some lines in the sand.” The trade imbalance, intellectual property theft, and ostensible formation of huge monopolies in industries including petrochemicals and agricultural chemicals in China requires the kind of zero-tolerance response from the West that Trump alone presents, DeLisi argues.

However, some executives question the effectiveness of Trump’s stance on trade and fault the president for erratic decision-making and poor management, contending that chaos in the White House creates an intolerable level of uncertainty for business managers.

“If I strictly put my business hat on, which is in opposition to my personal feelings, I think the administration has been both good and bad,” says Kate Hampford Donahue, CEO of the specialty chemical maker Hampford Research.

Donahue says she likes the course Trump set on trade and regulatory policy after the Obama administration. But “the tariffs have not helped at all,” she says. Trump’s trade war has combined with the closure of chemical plants in China during a continuing environmental crackdown to create dislocation in raw material supply for companies like Hampford, she says.

Donahue, a member of SOCMA’s Board of Governors, adds that the negative impact of the administration’s trade policy extends beyond China. “The tone of dealing with our overseas customers has definitely shifted,” she says. “There is wariness and aggravation, in some cases anger. There is a sense that the US isn’t playing by the same rules it used to play by.”

Several executives even express disappointment with how things have gone in areas such as deregulation since the election. Mara Gliozzi, vice president and business manager at McGean, a manufacturer of aviation maintenance chemicals and other specialty chemicals, says she was optimistic about prospects for business two years ago.

“I was hoping we would see some change in the government, where it’s run closer to how a business would operate,” says Gliozzi, who is also on SOCMA’s board. “Where decisions would be made and we would be able to move on to the next decision. This is the Art of the Deal man, right? Well, we don’t see a lot of things getting done.”

Staffing at agencies such as the US Environmental Protection Agency has been a problem, she says. “At EPA, Trump said that for every regulation put in place, two had to be taken out,” Gliozzi says. “I don’t know that any new regulations have been added, and he certainly hasn’t taken any out because there is not enough staffing to make anything happen.”

Aslam Malik, CEO of Ampac Fine Chemicals and initially a strong supporter of Trump, says he feels similarly let down. “Trump has some very good ideas about things that need to be done, but his approach is not what works in Washington, DC,” he says. Malik agrees with Gliozzi that government staffing is a problem. “For some reason he is very hesitant to appoint people. A lot of his appointments are temporary or interim.”

In fact, Malik finds the current level of chaos in the government debilitating. “Some people think chaos is good,” he says. “There is a notion that leaving things the way they are is bad and that you need change. But in my mind chaos makes people very uncomfortable and insecure. You have people at each other’s throats. Nothing gets done.”

Trump’s “one-man show” management style is particularly destructive, Malik says. “I think people like Rex Tillerson were great choices,” he says, referring to Trump’s former secretary of state. “But Trump never listened to them. Beyond appointing people, you have to give them authority.”

Indeed, even the president’s most ardent supporters have had to come to terms with misgivings.

“Cutting back taxes, cutting regulations, and putting good people on the [Supreme Court]. That is what I’m for,” says Louis Glunz, CEO of Regis Technologies, a family-owned maker of pharmaceutical chemicals. Glunz still thinks Trump is headed in a pro-business direction, although he has long worried whether mercurial Trump is “mature enough” to be president.

DeLisi likewise remains enthusiastic about the trajectory for small business under the current administration. He admits, however, to a high level of personal distaste for the Twitter-happy president. “If I were the king of the world,” DeLisi says, “I’d break his thumbs. But I’m not.”

A previous version of this story appeared on Jan. 15, 2019.