NEW YORK — Corporate America's widespread hope for slashing taxes and regulations is crashing into the harsh reality of a nationalist agenda focused on reducing immigration and dismantling a generation of liberalized trade rules.

The result could upset a post-World War II global economic order that has guided U.S. companies' strategies for decades.


Top chief executives and some of the nation’s largest business groups are clinging to hope that more moderate economic voices inside the Trump administration will eventually win out in favor of the globally focused approach from recent White Houses. But early signs are already emerging of potentially titanic battles between Trump and some of America's largest industries.

“I think it's too early to freak out, but Trump is changing the decision-making calculus to include new risks,” said billionaire Mark Cuban, owner of the NBA’s Dallas Mavericks, a Trump critic during the campaign who found himself on the receiving end of a presidential Twitter blast this past weekend.

The risks are both short term — with immediate public blowback for executives seen as collaborating with President Donald Trump — and much longer term for industries from automakers to retailers. Some firms could see their global supply chains upset by Trump’s inclination toward import tariffs and embrace of an immigration policy that could limit economic growth and damage companies’ ability to hire lower-skilled and high-skilled workers.

Trump restated his plan to renegotiate NAFTA on Monday during a joint press conference with Canadian Prime Minister Justin Trudeau while pledging to go easier on Canada than Mexico.

“We’ll be tweaking it,” Trump said of the 23-year-old trade deal. “We’ll be doing certain things that are going to benefit both of our countries. It’s a much less severe situation than what’s taking place on the southern border.”

Technology companies including Facebook, Google and Uber are already mired in a very public war with Trump over his now-suspended travel ban. But a broader reckoning on trade and immigration is coming that could create a sharp split between the business community and the White House.

Trump adviser Peter Navarro, a sharp critic of free trade deals, recently said the administration’s goal is to overturn a global supply chain that has allowed American companies to assemble products in the U.S. using parts from Mexico, China and other nations.

Pursuing that kind of agenda could hit all kinds of U.S. businesses large and small including major automakers, oil refiners, apparel makers and retailers who rely on materials from abroad to make finished products. There is no switch they can flip to start sourcing all these things in the U.S. without finding themselves at a sharp disadvantage to global competitors, experts say.

“This will prove challenging in the short run and detrimental in the long run,” said J. Bradford Jensen, an economist at the Peterson Institute for International Economics.

“Why do some of these activities move to other locations? Because they can be done more cheaply somewhere else. If we force firms to purchase more expensive intermediate inputs they will be less competitive globally. We will have fewer people in cutting edge, globally competitive service firms and more people making tennis shoes. And I guess we will count that as progress.”

Trump’s pledge to renegotiate the North American Free Trade Agreement, a deal that eliminated or greatly reduced most tariffs on goods shipped between Canada, Mexico and the United States, has companies worried.

U.S. exports to Mexico boomed since NAFTA went into effect, jumping from $41.58 billion in 1993 to $235.7 billion in 2015. The U.S. has a $50 billion trade deficit with Mexico but that is in part a result of Mexico’s weaker currency and the buying power of American consumers.

And free trade supporters worry that Mexico will retaliate against any new tariffs with levies of its own, sparking a trade war that would hit both American consumers and employers.

“It’s an enormous problem. You have cars being assembled in Mexico but many of those parts are made in the USA by American workers,” said Bill Hammond, a Texas-based consultant and former CEO of the Texas Association of Business. “Just here in Texas you’ve got thousands of businesses large and small that export products to Mexico and they would be hurt. Don’t forget that a lot of people blame the Smoot-Hawley trade tariffs for the Depression.”

Trump has not yet fully embraced a reform plan pushed by House Republicans that would impose a “border-adjustment” system that would tax imports but not exports. But he has hinted at supporting the plan despite sharp opposition from retailers, car dealers, oil refiners and Koch Industries, the giant conglomerate run by the politically active Koch brothers.

Many big U.S. employers also feel burned by Trump’s decision to immediately withdraw the U.S. from the TPP, a sprawling trade deal intended to remove thousands of tariffs on U.S. exports to Japan and 11 other Pacific rim countries.

Hundreds of U.S. beef and dairy companies, along with many other industries, pushed hard for TPP’s adoption. TPP was also intended to include a renegotiation of NAFTA with new labor and environmental rules for Mexico and Canada. All that work is now lost.

FedEx CEO Fred Smith recently called the cancellation of TPP a major mistake. And he strongly praised free trade in remarks shortly after the election. “We know that trade equals more markets and greater opportunities for U.S. companies, especially small and medium businesses, which comprise about 97 percent of U.S. exporters,” Smith said.

Trump is also expected to abandon the TTIP, a prospective deal intended to ease barriers to trade with Europe. And he’s had rocky initial dealings with German Chancellor Angela Merkel, French President François Hollande and other European leaders.

A serious disruption of trans-Atlantic trade ties would hit big American companies hard. In 2014, companies in the S&P 500 index earned just 52 percent of their revenue in the United States. The rest came from abroad with Europe and Asia each counting for about 14 percent.

Big tax cuts and fewer regulations could offer American companies a boost to offset some of the hit from potential trade restrictions. But the general posture of the Trump administration is leading Wall Street to downgrade expectations for growth.

“Following the election, the positive shift in sentiment among investors, business, and consumers suggested that the probability of tax cuts and easier regulation was seen to be higher than the probability of meaningful restrictions to trade and immigration," Goldman Sachs Group Inc. economists wrote in a recent note to clients. “One month into the year, the balance of risks is somewhat less positive in our view."

Corporate lobbyists privately say they expect that more strident views on trade and immigration inside the White House, championed by top advisers including Navarro, Stephen Miller and Steve Bannon, will eventually give way to more moderate approaches favored by National Economic Council Director Gary Cohn and Steven Mnuchin at Treasury.

Cohn has quickly emerged as a top adviser to Trump on economic issues and is helping craft the White House’s version of corporate and individual tax reform as well as proposals on infrastructure, regulatory relief and even an Affordable Care Act replacement.

But Trump himself has long favored immigration restrictions and punitive trade actions and made both central to his campaign. People who know the president say it is wrong to assume he will ever change his approach.

“Cohn and Mnuchin are both free-traders at heart and they understand how corporate America and business work,” said one Trump confidant. “Navarro and Miller and Bannon have no business experience whatsoever but they are influential. There is a huge battle for the heart and mind of the president and it is not even close to over.”