Today, President-elect Donald Trump issued a new threat to businesses who move their operations overseas. In a series of tweets issued Sunday, December 4th, Mr. Trump excoriated these companies while threatening to impose harmful tariffs on their products.
Mr. Trump’s approach is in keeping with his stated goal of keeping American manufacturing jobs in the United States. He has singled out businesses who hire workers in other countries to produce their products.
While this populist message has resonated with many Americans. But there are others who have their misgivings about this approach.
The President-elect’s Latest Threat
On the morning of December 4th, President-elect Donald Trump posted the following on Twitter:
The U.S. is going to substantially reduce taxes and regulations on businesses, but any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. without retribution or consequence, is WRONG! There will be a tax on our soon to be strong border of 35% for these companies.
Mr. Trump has also stated that he will provide incentives to businesses who agree to stay in the United States by lowering corporate taxes and eliminating regulations. These are two key components of his economic plans.
This past week, Mr. Trump worked with Vice President-elect Mike Pence to persuade Carrier Air Conditioning to keep 1,000 jobs in the country. The company agreed to keep 1,000 jobs in the country when they were offered $7 million in tax breaks.
Not everyone is happy with the way Mr. Trump handled the Carrier situation. There are several high-profile conservatives who feel that this move by the President-elect is just another example of crony capitalism.
Sarah Palin, an early Trump supporter, wrote an op-ed in Young Conservatives that criticized the Carrier deal.
“When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent. Meanwhile, the invisible hand that best orchestrates a free people’s free enterprise system gets amputated. Then, special interests creep in and manipulate markets. Republicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is one big fail.”
Palin isn’t the only one who criticized the Carrier deal. Ben Sasse, Republican senator representing Oklahoma tweeted this:
“Pres-Elect Trump means well. But won’t his 35% tariff idea raise prices on American families? How would it not be a new 35% tax on families?”
The fact that Carrier’s parent company, United Technologies receives a large chunk of their business from the federal government has also been seen as leverage for Mr. Trump. While he hasn’t explicitly said that the federal government will cease doing business with United Technologies, there are those who believe that the threat is implied.
Mr. Trump’s handling of Carrier Air Conditioning might be an indicator of how he will approach these companies when he is in office. But, the question is: how will this impact the business world?