RPT-BREAKINGVIEWS-Bully pulpit reshapes corporate-risk playbook

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Gabriel Rubin

WASHINGTON, Jan 8 (Reuters Breakingviews) - It's hard to describe Donald Trump’s power as constrained, considering he just captured a foreign leader wearing pajamas in his own country. For the most part, however, the U.S. president has increasingly relied on the bully pulpit to implement policy. His latest detail-lite declarations on housing and defense are signs that such influence is waning, but nevertheless force investors and companies to rethink their Washington risk management.

The coming weeks will provide evidence on whether the White House’s most expansive efforts are limited or not. Trump faces few roadblocks internationally, having bypassed legislators on tariffs and war. His agenda is nevertheless being clipped elsewhere.

As early as Friday, the U.S. Supreme Court will rule on the president's invocation of a national emergency to unilaterally impose import duties, During oral arguments, there were indications the justices were not receptive to the argument. If struck down, it would spark a $150 billion fight over refunds, dealing a severe blow to a key piece of Trump’s economic agenda, even if he can cobble together another half-baked replacement strategy.

His industrial interventions are equally complicated. A move in December to block offshore wind power on security grounds may be illegal, but litigation costs and lost output are straining developers such as Orsted and Equinor as they sue to restart projects.

New threats against defense contractors are also a boardroom problem, especially for RTX RTX.N, whose Raytheon weaponry division Trump singled out for criticism. The business depends heavily on government contracts for its nearly $30 billion of revenue, so it will have to carefully consider the ramifications of paying dividends and buying back stock, which the president said he would block, despite having no obvious authority to do so. As Amazon.com AMZN.O learned with its canceled $10 billion cloud computing contract, presidential pique can wreck a done deal.

Ideas such as banning Wall Street from buying single-family homes are better seen as mere intimidations. The executive has no legal mechanism to stop them, and Republicans will have their own re-election campaigns to prioritize. Barring a genuine emergency, there's no reason to expect any major tax or spending legislation this year. Nor will there be any significant regulation that couldn’t be reversed quickly under a new president.

CEOs cannot entirely ignore Trump's social-media whims. At a bare minimum, they will be distractions for management that demand additional contingency planning, pilgrimage to the U.S. capital, some tortured "deal-making" and perhaps even writing an unexpected check or two. The pulpit may be shrinking, but the bully stands tall.

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CONTEXT NEWS

U.S. President Donald Trump said on January 7 that his government is moving to prevent Wall Street firms from buying single-family homes in a bid to reduce prices, a potential blow for private equity landlords that also pressured homebuilder stocks. In a post on Truth Social, Trump said he was immediately taking steps to implement the ban, which he would also call on Congress to codify in law.

Separately, Trump vowed on January 7 to block defense contractors from paying dividends or buying back shares until they speed up weapons production.

(Editing by Jeffrey Goldfarb; Production by Maya Nandhini)

((For previous columns by the author, Reuters customers can click on RUBIN/gabriel.rubin@thomsonreuters.com))