Trump’s America Inc. Is Open. He Needs to Act Like Its CEO.

President Donald Trump’s tenure as CEO in his second term is producing positive economic results. (Chip Somodevilla/Getty Images)

Americans who have long wanted a CEO president finally have one in Donald Trump. He has in effect rolled up the voting shares of the public company we might call America Inc. With his control unassailable, he is setting terms for his customers, vendors, bankers, and employees.

From a bottom-line perspective, Trump’s tenure as CEO in his second term is producing positive economic results, despite the fierce criticism many of his policies receive. Even those who don’t like tariffs would acknowledge that Trump’s success shows that past presidents far underestimated their ability to push through change.

But many of Trump’s wins risk being undermined by his willingness to chase personal vendettas and assail those he sees as opposed to his policies. The inclusion of a political critique of Brazil’s government among a set of tariffs otherwise designed to alter trade balances raises doubts about his judgment. The escalating assault on the Federal Reserve will worry markets and raise questions about the Fed’s longer-term independence, which has helped keep inflation low for decades.

A CEO who threatened his success that way would risk a reprimand from his board and abandonment by shareholders.

A lesson Trump may have to learn is that while consolidated control of a company can allow for bold decisions that benefit all shareholders, it can also permit costly mistakes. Facebook founder Mark Zuckerberg discovered this in making an expensive, but ultimately wrongheaded, bet on the metaverse in 2021.

Just as Trump wisely pivoted in April on the size, scope, and timing of tariffs after a market rout, investors have pivoted in their views of his economic management. The stock market is hitting records, the bond market is stable again, and the latest economic data offer reason to cheer. Unemployment remains at a comfortable 4.1%, and the most recent reading of personal-consumption expenditure inflation is at 2.3%, far below the Covid-era peak.

The worst may be yet to come, but so far it isn’t here. Investors are betting that Trump will soften tariffs yet again before the Aug. 1 deadline. A recent Council of Economic Advisers report makes the case that imported goods are showing cost declines. Even the fiscal critics of the Big Beautiful Bill will welcome the dividends that come their way through tax cuts and enhanced business investment.

Tariffs will bring in new revenue, too. The Budget Lab at Yale, a think tank founded by Biden administration economists, estimates that as of July 10, tariffs will generate $2.6 trillion over a decade. They may also slow growth, but the boss would argue he is making a strategic decision to knock out the competition. “This is what you have to pay if you wanna do business in the United States,” as Trump put it on July 4.

Still, it is hard to square decisions such as the new 50% tariff on Brazil’s imports. It doesn’t fit the strategy—Brazil has a trade surplus with the U.S., not a deficit—and Trump has justified it as a way to punish Brazil for prosecuting his ally, former President Jair Bolsonaro. A CEO who acted like that would quickly drown in shareholder lawsuits.

A board would also have sharp questions for an executive who racked up trillions in new debt while simultaneously assailing his banker. The Congressional Budget Office expects the newly signed Big, Beautiful Bill to add $3.3 trillion to the debt over a decade. But it is Federal Reserve Chair Jerome Powell who “DEMEANS THE GREAT CREDIT OF THE USA,” as Trump posted on Thursday. He wants Powell to lower the nation’s “refinancing costs” on its $36-odd trillion in outstanding debt.

Never mind that the credit of the U.S. is already tarnished. Moody’s in May became the third major rating firm to downgrade U.S. credit in light of the nation’s paralyzed political process. Attacks on Powell may only harden the Fed’s determination to do what it sees as best in terms of monetary policy.

Trump will soon get a new say over who chairs the Fed, since Powell’s term as chair expires next spring. But it is the bond market that will ultimately determine U.S. rates. Signs there are worrying: The projected yield on the 10-year Treasury note 10 years from now is well above 5%. Investors foresee a debt-soaked future for the nation, even if Trump and his next Fed chair manage to talk down short-term rates.

The most successful executives know how to restrain spending while protecting the investments that spur future growth. Trump, however, is looking to slash the meager but hyperproductive federal budget for basic science by a third, from $45 billion a year to just $30 bill, according to the American Association for the Advancement of Science. Those and other similar cuts will make minuscule changes to America Inc.’s vast balance sheet, but will take their toll on the enterprise over time.

To be sure, every visionary CEO has had doubters. Zuckerberg, like Trump, isn’t nationally popular. But investors who abandoned the Meta CEO in October 2022 when the stock was near $90 would have missed out on its astonishing climb to more than $700 a share today. Zuckerberg retains voting control of the company, so pivoting on his metaverse outlays required a personal change of mind.

Trump can certainly change his mind. (Just ask the Iranians.) But tariffs and the Fed will be ongoing tests of his ability to put data and judgment ahead of personal agendas. Fail those, and America Inc.’s shareholders will be calling for his head, whatever results he achieved in the past.

Write to Matt Peterson at matt.peterson@dowjones.com