Why companies are rushing to flatter Trump

US President Donald Trump’s executive order halting funding for all diversity, equity and inclusion (DEI) programmes and activities has caused havoc among the federally funded institutions it applies to. However, it has also prompted a wide range of companies, including pharmaceutical multinational GSK, to announce reviews, pauses and revisions of their own DEI commitments. Some changes are more subtle – Pfizer, for example, now refers to ‘merit-based’ diversity, equity and inclusion, in an apparent nod towards the government’s rhetoric around DEI programmes.

On the surface, these firms have no obligation to conform to Trump’s political whims. GSK is a UK-based company, and even though Pfizer has its headquarters in the US, it is a corporation, not a federal agency. But it’s clear from the language around the various announcements that these moves are at least partly motivated by the importance of the US market, and the prudence of avoiding potential conflict with its new administration.

GSK asserts that it remains strongly committed to being an inclusive workplace, and that its existing DEI programmes will not necessarily be stopped altogether, but may be modified after reviews and consultation with staff.

Elsewhere, there are other signs that Trump’s other policies – such as his extensive trade tariffs, are also influencing companies’ decisionmaking. Eli Lilly has unveiled a plan to invest $27 billion in four new US manufacturing facilities, for example. Three of those will make active ingredients, while the fourth will produce injectable medicines. These plans will have been in development for some time – the pharmaceutical industry has been reducing its reliance on China and India for drug manufacturing for several years, and boosting US domestic drug production has enjoyed political support across the board through several presidential terms.

Still, it’s likely that Trump’s tariffs on goods from China, Canada and Mexico, and threats of tariffs against the EU and elsewhere, may have further tipped the balance in favour of committing to US plants. In the same vein, Pfizer has said that it will look to reconfigure some of its extensive manufacturing network to lessen the effect of trade tariffs – moving production of some drugs currently made overseas to its US plants.

To an extent, companies will naturally bend themselves in the prevailing political winds, as part of their imperative to deliver profits. Sometimes that means seizing advantages that align with longer-term goals. But sometimes it carries the risk of eroding intangible commodities like trust and pride, which are easy to lose, and much harder to regain.