When Donald Trump convened the CEOs of German chemical company Bayer and U.S. seed giant Monsanto at Trump Tower last week, they made the usual small talk.
Trump then asked specific questions about the $66 billion merger they are in the middle of, according to people briefed on the meeting. The companies committed to $8 billion in new research and development, along with 3,000 new jobs and a commitment to keep 9,000 other jobs in the United States, if the merger goes through.
Sean Spicer, the incoming White House press secretary, credited Trump with the commitment in a call Tuesday morning. "The reason for this commitment and expansion is because of the president-elect’s focus on creating [a] better business climate here in the United States which has already increased consumer and small business confidence since the election," Spicer said.
Yet the merger of the companies – the second-largest deal announced last year -- hasn't been approved by the federal government that Trump now controls - and regulatory concerns remain, especially because it could reshape the world’s food supply. And Trump doesn't yet have an agriculture secretary to even consider whether the deal would help farmers and set policies on such mergers.
The tactic shows how his hands-on style could create problems, how he’s blurring lines in the way traditional government works, and how committed he is to forcing companies to create new American jobs to fulfill his political promises. He has personally become involved in a number of deals, including bids to save jobs at auto plants and with Carrier, an Indiana air conditioning company. His tweets have rattled the stock market and sent company CEOs hurriedly rushing to Trump Tower for a meeting. They have privately angered business executives, who say business policy shouldn't be set by a president-elect in 140 characters.
Publicly, however, executives have spoken glowingly about Trump’s approach to the business community, given they have no other choice.
Boeing CEO Dennis Muilenburg, whose company has been the target of Trump’s tweets for the price tag of its Air Force One contract, visited Trump Tower again on Tuesday and said the president-elect is doing a “great job with engaging business.”
Trump seems to enjoy the spectacle of it all, and has so far gotten commitments from a number of companies to keep jobs in the United States - and from other companies to enter into negotiations on the price of jets. "He's using the bully pulpit pretty damn well if you ask me," said Vincent Pitta, a labor lawyer in New York who is friends with Trump and has met with him twice since he won office. "No one ever pushed these companies to keep the jobs like this, and he hasn't even taken office yet."
But experts have also noted some of the commitments were previously made, or that Trump and his team exaggerated what the company would do or how much they were involved in the decision.
"There's nothing illegal about the president discussing an individual merger, but it's practically unheard of and not a good idea," said Richard Painter, a top ethics lawyer in the Bush White House. "It can start to look like the president is playing favorites and can send all sorts of mixed signals to the business community. And he needs to be spending his time worried about big-picture details and not individual details."
People familiar with the meeting cautioned that Trump told the executives that the merger would go through all regulatory channels, and that he wasn't signaling formal support or disapproval. And there is nothing illegal with a president casually chatting with an executive about the company's behavior, Painter said.
Werner Baumann, the CEO of Bayer, and Hugh Grant, the chairman and CEO of Monsanto, said in a joint statement on Tuesday that their confab in Trump Tower was a “productive meeting” and characterized the jobs and R&D agreement as “an investment in the U.S. heartland.”
Painter said the Bush White House became involved once in a Chinese oil company merger, but the president wasn't personally involved. "It just doesn't make sense to be," he said.
The $66 billion deal announced in September would marry Monsanto’s seed, biotech and precision agriculture businesses with Bayer’s chemical prowess, which the companies say will spur innovations that would help farmers deal with a host of issues from pests to irrigation and yield.
The companies say that merging is the only way to survive the expensive and time-consuming process of getting a new GMO crop or pesticide on the market. Developing a new GMO crop costs about $136 million and takes 13 years, with about six years of that due to the regulatory approval process, according to a 2011CropLife International study — a timeframe that the industry is very quick to cite as they make the case for consolidation. The high costs require deep pockets.
Bayer's interest in Monsanto is also due to the different strengths of each company: Monsanto is a biotech and seed company that has for decades focused more on crop breeding than on pesticides, while Bayer is a chemical company in search of a bigger U.S. footprint.
But the deal, which came just months after the announcement of two other agrochemical mergers, has sparked concerns among commodity groups and lawmakers worried about increases in seed and pesticide prices amid falling farm incomes.
Leading the charge on Capitol Hill is Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa), who has pushed regulators to block the deal.
"I am concerned that the merger will curtail chemical and seed choices, and raise prices for farmers and the American consumer. In addition, I am concerned that the proposed deal will harm research, development and innovation," the Iowa Republican said in a Nov. 2 letter to the Justice Department's antitrust division.
Among those advocating against consolidation in the agrochemical industry is Bruce Rastetter, an Iowa agribusiness leader and Republican mega-donor, who also serves on Trump’s agricultural advisory council. Rastetter says the deals would limit competition, raise costs for farmers and stunt job growth.
“It’s not surprising that the people who will benefit most from the merger are anxious to convince President-elect Trump that it won’t harm farmers and agriculture,” Rastetter said in a recent interview with POLITICO. “Trump is smart enough to know that when fewer companies are selling products, there is less competition and prices go up.”
Painter said that Trump, if he wants to set economic policies, should propose laws across the board and not get involved in the specifics of deals with companies.
"He's bringing too much of his New York dealmaking style to the White House," Painter said. "There's a separation of economic and political power, and economic deals don't need to be made in the White House and they need to be made free of political interference."