Conceding to extreme partisan demands is a losing bet

In October, Trump’s allies threatened to terminate Deloitte’s government contracts—worth about $3 billion annually—if Trump is elected to a second term. Why? Because one of their 457,000 employees made old messages with JD Vance public. 

As part of his authoritarian playbook for 2025, Trump has pledged to wield the power of government against his perceived enemies, such as by directing the Justice Department to prosecute opponents and the Federal Communications Commission to revoke broadcast licenses. 

Trump already road-tested the use of state power to retaliate during his first term, including by attempting to block the merger of CNN’s parent company, Time Warner, with AT&T because of perceived unfavorable coverage. A judge ruled against the administration—but the company appeared cowed nonetheless. CNN took steps designed likely, at least in part, to accommodate Trump, dismissing its chief executive, the focus of Trump’s ire, and firing several reporters whose journalism was critical of the former president. 

An autocrat using regulatory powers to silence critics is hardly novel. But for Trump and his allies, the threats against Deloitte preview an escalation—a harbinger of how a second term would use a far more expansive array of federal levers to bring sources of dissent to heel. “Staying silent” is not the nature of the demand—what most businesses are inclined to do anyway. Instead, the demand is to become political by taking actions that demonstrate allegiance. 

That is, Trump, as with most autocrats, intends to force businesses to play politics, including by policing their employees’ private speech.

What should Deloitte do?

Trump and his allies are hardly keeping their intentions secret. According to Project 2025, the Office of Federal Procurement Policy—nestled within the Executive Office of the President—“should be engaged early and often” in policymaking “to push back against woke policies in corporate America.”

Businesses like Deloitte might contemplate one of two responses, neither of which are likely to keep them out of trouble, at least in the long-term.  

First, they could stay silent and hope the storm passes. So far, this seems to be Deloitte’s bet. Aside from a generic statement about the firm’s nonpartisan bona fides, it has kept quiet. Meanwhile, Trump’s allies have been ratcheting up calls to “immediately and publicly respond.” Deloitte’s approach may work for now. But if again in office, it is hardly difficult to imagine the president directing a reprisal if the firm refuses to take certain actions. “We’re not forgetting this,” Trump Jr. said recently in a post.

Fearing very real repercussions, Deloitte could instead try appeasement. This was the approach taken by Akima, another federal contractor, which in 2018 fired an employee who had given the middle finger to Trump’s motorcade. (The employee sued Akima in 2018, represented by Protect Democracy.) In the short-term, some businesses may avoid consequences by simply complying with demands, such as firing employees for exercising free speech. 

Appeasement doesn’t work

This might in turn prompt other firms to follow suit preemptively—for example, to enact internal policies aimed at stifling employees’ speech in order to avoid future threats themselves. Yale historian Timothy Snyder terms this adaptive behavior “anticipatory obedience,” when “individuals think ahead about what a more repressive government will want, and then offer themselves without being asked.”

But as the researchers Roberto Stefan Foa and Rachel Kleinfeld find, in a global study of how businesses fare under populist authoritarians, these bets tend to not pay off. In lieu of “free competition and a predictable rule of law,” autocrats change the operating environment in ways that are notoriously volatile; staying in their good graces is typically a losing game. “It is this change to the nature of governing, more than individual policies, that is so dangerous to business over the long-term,” they conclude. In this case, standard rules that govern a fair and predictable procurement process are replaced by the whims of a vengeful and volatile autocrat. (That’s not to mention the collateral consequences of appeasement, such as acquisition and retention costs.)

Appeasement is likely to not just fail, but to make things worse. Autocrats observe that their threats pay off—and so they escalate them. Foa and Kleinfeld hold up Hungary as a “cautionary tale,” where those who saddled-up next to Viktor Orbán, its autocratic leader, initially became more likely to win public tenders. But there “was no guarantee” that winners would stay winners. “Business leaders who thought they were allies could just as quickly fall out of favor.”

The best bet for business is the one to take now, before finding oneself in an autocrat’s crosshairs. Deloitte should communicate its positions clearly: that it will not police its employees’ private speech, and that it will not accede to demands that inappropriately involve the company in politics. And it should do so together with its peers. That is, the industry—Deloitte and its competitors—should communicate with one voice: If one firm’s contracts are retributively terminated, others will not fill the gap. 

Collective action is the antidote

This is not without recent precedent. When Florida’s governor and state legislature sought to penalize Disney for exercising its free speech rights, Leadership Now Project, a national network of business leaders, filed an amicus brief underscoring the threat that government retaliation poses to investment and innovation. Similarly, national and local Florida businesses banded together in support of two private companies, represented by Protect Democracy, to block speech codes that the governor sought to impose on private employers’ race-related workplace trainings as part of HB 7, or the so-called Stop WOKE Act.

Further, the law here is on the industry’s side, and the industry should say so, reminding political leaders that it is committed to the rule of law. The First Amendment prohibits the federal government from terminating a federal contract based on the off-duty speech of a contractor’s employees. Retaliation on the basis of constitutionally protected speech would constitute a flagrant violation of the First Amendment’s protections, absent some legitimate governmental interest—which does not include a president’s personal political interests.

Of course, a second Trump administration may test the wherewithal of business anyway. But it is certainly easier to co-opt individual firms than an industry standing together.

It is squarely un-American for any presidential candidate to threaten retaliation. We encourage Deloitte and other firms to work through industry associations and ad-hoc coalitions to insist on operating free from coercion, regardless of the election outcome. Collective action is the antidote to the dangers of appeasement. Otherwise, as Snyder warns, one “who adapts in this way is teaching power what it can do.”

Daniella Ballou-Aares is the founder and CEO of the Leadership Now Project. Grant Tudor is a policy advocate with Protect Democracy.