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CEO defections don’t mean that Trump is losing business support

  • The defections by several CEOs, including Merck's Kenneth Frazier, Intel's Brian Krzanich, and Under Armour's Kevin Plank, from Trump's manufacturing council have prompted suggestions that he is losing business support.
  • The truth is, while he may be known as the business president, since he comes from a background of real estate and not politics, he never had the level of support from business leaders that past presidents have enjoyed.
  • CEOs leaving the president's manufacturing council all represent industries and business practices Trump attacked even before he was president, making their participation on the council awkward in the first place.
  • That gives Trump the golden opportunity to continue to use his "carrot and stick" approach to big business.
  • Importantly, it does nothing to change his populist appeal. In fact, a rift with CEOs might actually help his appeal with the base.
President Donald Trump smiles while walking towards the White House on the South Lawn after disembarking Marine One in Washington, D.C., U.S., on Monday, Aug. 14, 2017.
Andrew Harrer | Bloomberg | Getty Images
President Donald Trump smiles while walking towards the White House on the South Lawn after disembarking Marine One in Washington, D.C., U.S., on Monday, Aug. 14, 2017.

Three CEOs and counting have left President Donald Trump's presidential manufacturing council over what some have said they believe is his inadequate and/or badly delayed response to the racially-laden violence in Charlottesville, Virginia this past weekend. Scott Paul, president of the Alliance for American Manufacturing, also said he would drop out of the council Tuesday.

Does this mean President Trump has lost CEO and big business support? Does this now mean that the great promise that his administration held for American business has been dashed forever?

The answer to both questions is "no" because neither one of those things ever really existed in the first place. And there's a good chance President Trump wants it that way.

To say that President Trump has had anything like the kind of personal support previous presidents have enjoyed from business leaders — especially Republican presidents — was a stretch from day one. That was to be expected after then-candidate Trump bashed corporate America at almost every turn during the campaign on issues like outsourcing, immigration, and trade deals.

And the campaign donation scorecard from 2016 proved that corporate America responded in kind, giving to the Clinton campaign over team Trump by wide margins in industry after industry. That was especially true in the tech sector, where people who work in Silicon Valley donated 60 times more money to Hillary Clinton than to Donald Trump.

That certainly makes the defections of people like Merck's Kenneth Frazier, Intel's Brian Krzanich, and Under Armour's Kevin Plank a little easier for President Trump to push back on, as he did on Tuesday when he tweeted that they were "grandstanders" and he has replacements for the defectors:

This followed his tweet on Monday, aimed squarely at Merck's high drug prices:

And yet, President Trump still remains committed to boosting the economy through business-friendly proposals like reducing the corporate tax rate and eliminating costly regulations. Of course, that's still not surprising, given the fact that the president is a lifelong businessman who obviously still thinks like one much of the time. And during his first week in office, he said he feels confident in sometimes criticizing big business because he believes the tax and regulation cuts his administration is promising --and in some cases already delivering -- are enough of a reward to American companies.

For any other president, this would be a form of political suicide. But President Trump's now long history of playing a renegade has paid off for him time after time. He's already proven to be the first Republican in modern history to be able to win a national election without strong corporate support, and it's obvious he thinks he can do it again.

President Trump often gets to have it both ways. He gets a certain degree of normalcy and establishment acceptance when he does things like being able to attract big name CEOs to his manufacturing council. (There are still nearly 20 business leaders on the council.) Until each and every one of them bolts, President Trump still gets a lot of positives. But then he gets to renew his populist credentials when he bashes those who choose to leave it for almost any reason.

And the CEOs who stay on or leave the council will enjoy the benefits of President Trump's pro-business policies either way. It's something of a win/win for them, too, in this symbiotic and shallow relationship.

As embarrassing as these CEO defections would be for those in the political class, this renegade president is simply a different case entirely.

The manufacturing council, for whatever it's worth, will continue to function in the perfunctory "for show" way it would have with or without the CEOs who have bolted. And the fate of more tangible Trump administration goals, like tax reform, will be decided by other factors because so many other groups besides this White House are pushing for them.

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

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