President Trump’s decision Thursday to impose crippling tariffs on the imports of steel and aluminum took many by surprise — particularly investors, as the Dow Jones Industrial Average closed the day’s trading down more than 400 points, or 1.7 percent, at 24,608.
But one billionaire investor and former Trump adviser, Carl Icahn, was seemingly unvexed, having dumped a million shares tied to the steel industry a week before the president announced 25 percent tariffs for foreign-made steel.
A Feb. 22 SEC filing shows Icahn sold off his $31.3 million stake in the Manitowoc Company, which is a leading global manufacturer of cranes for heavy construction based in Manitowoc, Wis., according to the company’s website. Since Trump’s announcement Thursday, Manitowoc’s stock has plummeted to about $26. Icahn — who has had majority interest in several companies including Motorola, Xerox, Family Dollar and Pep Boys — had sold his shares for about $32 to $34 each, according to the SEC disclosure, which was first reported by Think Progress.
Icahn had not actively traded any Manitowoc stock since January 2015, according to regulatory filings.
The tariffs are Trump’s response to a determination by the Commerce Department earlier this month that increasing import volumes posed a risk to U.S. national security. Trump’s decision, which leans on a little-used provision of U.S. trade law, has now caused other countries to retaliate against American exports. The European Union, for example, is considering duties on U.S. imports worth about $3.5 billion if the White House enacts its tariffs, Reuters reported Friday.
“We’ll be imposing tariffs on steel imports and tariffs on aluminum imports,” Trump announced at the White House Thursday. “You will have protection for the first time in a long while, and you’re going to regrow your industries.”
Trump and Icahn’s history is one of friends turned foes turned friends. It began in the early 1980s, when Trump tried to win over Icahn with a helicopter ride. In 1988, when Trump paid $11 million to host a heavyweight title fight between Mike Tyson and Michael Spinks in Atlantic City, Trump took Icahn, known at the time for his series of hostile corporate takeovers, backstage to meet Tyson. During the announcer’s roll call of famous guests, Icahn was called Trump’s “good friend,” according to the New Yorker.
In the early 1990s, Icahn headed the deal that allowed Trump to keep some of his power and ownership of his Taj Mahal casino during its first bout with bankruptcy. Trump’s share of the casino, about 50 percent, was a generous one, but Icahn articulated that investors could still boot Trump out. Many involved in the deal thought Icahn had outmaneuvered Trump, according to The Washington Post’s Drew Harwell.
By 2010, Trump Entertainment Resorts was flooded with debt, and Icahn pushed to take over, saying Trump’s brand had become a “disadvantage” that may no longer have been “synonymous with business acumen, high quality . . . and enormous success.”
Tensions appeared to have eased by the time Trump ran for president, as he spoke fondly of Icahn, calling him one of the “great businessmen of the world,” smart enough to tackle U.S. negotiations with China. In return, Icahn endorsed Trump, saying the country would be “lucky” to have him in the Oval Office, Harwell reported.
Though Icahn no longer advises Trump in a formal role, the two reportedly still talk. Icahn resigned from his position as a “special adviser” to Trump on regulatory reform in August, claiming he didn’t want to step on the toes of Neomi Rao, the administrator of the Office of Information and Regulatory Affairs, and because he wanted to avoid conflicts of interest over regulations that would affect an oil refinery company he owns, CVR Energy.
“Indeed, out of an abundance of caution, the only issues I ever discussed with you were broad matters of policy affecting the refining industry,” he said in his resignation letter to Trump. “I never sought any special benefit for any company with which I have been involved, and have only expressed views that I believed would benefit the refining industry as a whole.”
Icahn’s resignation came 10 days before the New Yorker published an extensive profile on him, suggesting Icahn used his White House position — and access to government officials — to protect his investments. According to the article:
Icahn’s role was novel. He would be an adviser with a formal title, but he would not receive a salary, and he would not be required to divest himself of any of his holdings, or to make any disclosures about potential conflicts of interest. “Carl Icahn will be advising the President in his individual capacity,” Trump’s transition team asserted.
In the months after the election, the stock price of CVR, Icahn’s refiner, nearly doubled — a surge that is difficult to explain without acknowledging the appointment of the company’s lead shareholder to a White House position. The rally meant a personal benefit for Icahn, at least on paper, of half a billion dollars. There was an expectation in the market — an expectation created, in part, by Icahn’s own remarks — that, with Trump in the White House and Icahn playing consigliere, the rules were about to change, and not just at the E.P.A. Icahn’s empire ranges across many economic sectors, from energy to pharmaceuticals to auto supplies to mining, and all of them are governed by the types of regulations about which he would now potentially be advising Trump.
Before stepping down, Icahn had been trying to push a policy that would benefit his oil company. But the Environmental Protection Agency planned to reject that policy, which would alter regulations designed to promote ethanol use by requiring refiners to blend mandated levels of ethanol and other renewable fuels into gasoline.