Thought of the Week:
This past week, my daughter had her—ahem—birthday. Together, my wife, son, daughter, and I all went to dinner. It sounds simple, but it’s something we don’t do often enough since the kids moved on, we sold our home, and downsized into a condo. While I knew I was getting the bill at the end of the meal, for the most part, I just sat back and enjoyed the good-natured ribbing my son and daughter gave one another. My daughter teased my son about his lack of knowledge concerning the upcoming Ravens season; and my son gave it right back to her, explaining that no, Flavor Flav was in Public Enemy with Chuck D, and it was Dr. Dre, Ice Cube, and Eazy-E who were in NWA. According to him, how would she know, it’s Rap, not Modern Country. Last week, that back-and-forth was music to my ears. Twenty years ago, not so much. Then, the razzing was tattling and cries of “he hit me,” “she keeps touching me,” “he/she took my __.” As a parent, in situations like those, there was only one solution—punish one for doing whatever they did, punish the other for tattling, and tell them both to work it out between themselves next time. The solution always worked…for 24 hours (maybe less). In this hyperpolarized election season, businesses don’t have the luxury of implementing internal solutions that only work for less than a single business day. This election cycle, where progressive political forces will square off with the MAGA crowd, firms are choosing to tread carefully in their communications, conduct, and workforce management. A survey of 103 marketing and communications experts reveals the extent to which companies are going to minimize internal strife and safeguard their image from external criticisms. For the most part, corporate America is playing it safe. Internally, firms are focusing on uncontroversial, widely accepted election-related initiatives—encouraging employees to vote and giving them both time off to vote and/or volunteer at the polls. Avoiding workplace tension is the name of the game. Firms are setting clear rules for employees that involve coaching managers and employees on acceptable behavior and establishing written policies about political activism in the office. In short, by staying politically neutral yet supporting the democratic system, companies are hoping to stay out of the headlines while gaining respect for being good corporate citizens. And for the most part, the new neutrality also extends to avoiding taking stances on social and political issues. The chart below highlights just some of the measures companies are taking to reduce reputational risk.
Thought Leadership from our Consultants, Think Tanks, and Trade Associations
Capstone Says Trump Will Impose Tariffs on Host of Products in a Potential Second Term, with Section 301 China Tariffs Likely the First Move. If former President Trump is elected, he will use executive authority to introduce new trade barriers and fortify existing ones. In fact, he would be expected to increase tariffs on a range of products, just as he did during his first term. While increasing Section 301 tariffs on Chinese imports would be an early priority, U.S. agriculture exports would be targeted by any retaliation. Among the specific trade actions a second Trump administration may take are:
- Modifying Section 301 tariffs. This could be done in several ways, including pulling forward the effective dates of tariff increases the Biden administration delayed until 2026, increasing existing tariffs on all covered products to 60%, or expanding Section 301 coverage to all Chinese imports. Batteries would be expected to be targeted in early tariff action.
- Implementing a 10% universal tariff without Congress’s approval. The tariff would have sweeping impacts, particularly on retailers.
- Renegotiating the US-Mexico-Canada Agreement (USMCA) with a focus on automotive rules of origin (ROO) and an effort to limit Chinese investment in Mexico.
- Revoking China’s Permanent Normal Trade Relations (PNTR) status, which would raise the average tariff rate applied to Chinese imports to 40% from 3.5%. However, unlike other trade policies, Congress would need to act to revoke China’s PNTR status, a significant obstacle.
- Targeting Vietnam with a Section 301 case with the goal of reducing the trade deficit or going after automotive imports from various countries with a Section 232 case.
Observatory Group Croons ‘It’s All About the Base.’ Vice President Harris’ choice of Minnesota Gov. Walz has set up a progressive vs MAGA showdown for the November election. Both former president Trump and VP Harris had opportunities to choose running mates who would move the ticket’s balance toward the middle, but both chose the preferred pick of their party’s base. On policy, Vance was a MAGA double down for Trump and Walz is a progressive double down for Harris. Included among the record on which Walz will run as a progressive:
- Signed a law giving undocumented immigrants drivers licenses, college tuition, and healthcare;
- Signed a law making Minnesota a “sanctuary state” for medical gender transitions for minors;
- Signed a law removing all abortion restrictions based on gestational duration;
- Signed a law to make Minnesota 100% renewable energy reliant for electric needs by 2040;
- Signed a law providing free school lunches to all Minnesota public school students; and
- Signed a law prohibiting religious affiliated private schools from requiring a statement of faith.
Although there is little that appeals to moderate and independent voters in the Walz pick, the Harris campaign believes broader appeal will come from Walz’s biography and demeanor. The folksy veteran, former football coach, and former high school teacher, has deep connections to rural America that add to his persona. Additionally, he is adept at media appearances and is credited with starting the “JD Vance is ‘weird’” campaign that went viral on social media. Since President Biden dropped out of the race, Harris has not taken a single question from a reporter; Walz on the other hand has done multiple media appearances. With Walz on the ticket, it gives the campaign a media savvy running mate who can be the face of the campaign and keep the hard questions away from Harris. Democrats are betting that the contrast of a progressive, but folksy Midwest governor vs the 40-year-old MAGA Midwest senator will help win the Midwest battleground states of Wisconsin, Michigan, and Pennsylvania. In addition, Walz pleases organized labor, and will rally progressives on reproductive and LGBTQ+ rights. Walz gives Republicans multiple openings to attack the Harris/Walz ticket—expect ads on race riots, COVID lockdowns, and transgender issues. The choice of Walz was not intended to change the dynamics of the race but to appeal to the Democrats’ progressive base. Two weeks before the Democratic convention, the race is a 50/50 tossup that it is going to come down to who can motivate their base while appealing to moderate, independent voters who are still caught in the middle. Arguing against the choice of Walz, and for Governor Shapiro is the fact that ninety days before the election, the most important swing state is Pennsylvania; even if Harris wins Michigan, Wisconsin, Arizona, and Nevada, without Pennsylvania, she would come up short of winning the Electoral College.
“Inside Baseball”
Although there’s a newfound enthusiasm among vulnerable Democrats for Vice President Harris’ and Minnesota Gov. Walz’s campaign, Punchbowl News reports that at-risk Democrats aren’t booking their flights to Chicago for the Democratic National Convention. With the Senate at stake of falling into Republican control and the GOP targeting dozens of at-risk House Democrats, some members are prioritizing their own campaigns over the convention. To be sure, lawmakers occasionally skip conventions. The four-day-long bonanza is more for donors, delegates, and the presidential race than it is for rank-and-file members. Regardless, a number of Democrats will flock to Chicago to speak at the convention, fundraise, and socialize. The press will be there in force too. Still, the absence of vulnerable Democrats is interesting given that most frontliners have vocally united behind the Harris-Walz ticket. Harris’ packed rally last week in Atlanta, captured the attention of many rank-and-file Democrats who were unenthusiastic about President Biden. In fact, the swing-state show of force was light years ahead of any public display of support for Biden this cycle. The Harris campaign followed that up with another raucous rally in Philadelphia to introduce Walz as her running mate, and the pair drew huge crowds later in the week in Wisconsin and Michigan. But for incumbents in truly ruby-red territory, there’s an understandable desire to distance themselves from the top of the Democratic ticket.
In Other Words
“Everybody thought, ‘That’s a great idea,’” third-party presidential candidate Robert F. Kennedy Jr. (I) discussing the thought process behind dumping a bear carcass in Central Park.
Did You Know
Following the House Judiciary Committee’s approval of three articles of impeachment, fifty years ago today, President Richard Nixon resigned from office on August 9, 1974, becoming the only U.S. president to do so. His successor, Gerald Ford, pardoned him a month later.
Graph of the Week
The most interesting polling story since Vice President Harris’s nomination has been the massive increase in her favorability numbers. Americans had a generally unfavorable view of Harris throughout her vice presidency, in line with President Biden’s persistently low approval rating. As she emerges as a national figure distinct from Biden, the trend is on track to nearly reverse. Contrary to analyst expectations, her favorability numbers jumped six points in two weeks (politicians newly in the public eye generally do not become more popular). Reflecting a surge in Democratic enthusiasm about her candidacy and heightened favorability among independents, Harris is on her way to successfully distancing herself from the still-unpopular Biden, limiting a key liability for her campaign.
