Leave The Country – Face The Consequences
By 12/1/16 3:43 PM
“Leaving the country is going to be very, very difficult,” Trump said in a warning to businesses that, like the Carrier facility he visited for his first event as president-elect, might consider moving south of the border to cut costs.
“There will be consequences,” he cautioned.
Through a combination of attractive tax rates and protective tariffs, Trump said he would coax more manufacturing operations to remain in the U.S.
“We’re going to be lowering our business tax from 35 percent to, hopefully, 15 percent,” Trump said.
The president-elect, who made manufacturing a centerpiece of his campaign focus on jobs, promised to roll back regulations that have proven unfriendly to businesses.
“We need regulations for safety and environment and things, but most of the regulations are nonsense,” Trump said. “It’s become a major industry, the writing of regulations.”
Trump’s visit to the Carrier plant Thursday alongside Vice President-elect Pence was intended to highlight a reversal in the company’s decision earlier this year to move Indiana-based jobs to a factory in Mexico.
Trump said Carrier had agreed to save 1,100 jobs in the state, reportedly both in its Indianapolis factory and its engineering headquarters.
“The goodwill that you have engendered by doing this…you watch how fast you’re going to make it up, because so many people are going to be buying Carrier air-conditioners,” Trump told Greg Hayes, CEO of Carrier’s parent company.
Pence, who introduced Trump at the event, said the day in February that Carrier announced its intention to close up shop was “heartbreaking” for the people of Indiana. And although Pence said he attempted to persuade Carrier executives to change their minds during a meeting in March, “it was clear that the die was cast,” he noted.
At the time, Obama administration policies were “literally driving jobs out of this country,” Pence said.
The vice president-elect argued it was Trump’s victory in the presidential race and his personal interest in the Carrier plant’s fate that tipped the scales in favor of a deal that kept the company operating in Indiana.
Carrier, a subsidiary of United Technologies, could have saved roughly $65 million a year by moving its Indiana-based operation to Mexico.
In a statement Wednesday on the deal, Carrier said concessions granted by Indiana factored into its decision to stay.
“Today’s announcement is possible because the incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive U.S. business climate,” the company said. “The incentives offered by the state were an important consideration.”
Indiana, still governed by Vice President-elect Pence, reportedly offered United Technologies $7 million in tax breaks to be distributed over the next 10 years in exchange for a continued presence in the Hoosier State. That means the state ceded roughly $7,000 for each job that will remain in Indiana for the next decade.
Trump made Carrier a frequent target of his economic populism on the campaign trail after the company announced in February its intention to cut 1,400 jobs in Indianapolis and move them to Mexico.
“We’re not going to lose Carrier air-conditioning from Indianapolis, you know that deal very well,” Trump said during a campaign rally in Westfield, Indiana in July. “Fourteen-hundred people out of jobs, viciously, they’re moving to Mexico.”
Trump had promised “consequences” for companies that shuttered American plants and attempted to import foreign-made goods back into the U.S., a campaign rallying cry he has continued to promote since winning the presidency.
“We’re not going to let Carrier come in, make air-conditioners in Mexico, sell the air-conditioners to us, across a very strong border now, without consequences, and when we explain to the heads of Carrier that, here’s the story, either stay, or if you want to go to Mexico, we wish you a lot of luck, but when you sell your air conditioners, you’re going to pay a 35 percent tax as those air conditioners cross the border,” Trump said at the time. “And you know what’s going to happen? They’re not going to move.”
While the White House has praised Carrier’s decision to maintain an operation in Indianapolis, press secretary Josh Earnest suggested this week that Trump would need to strike 804 deals of similar size to preserve the number of jobs the Obama administration says it has saved over the past eight years.
Trump earned accolades from Republicans and Democrats alike for his role in the Carrier deal.
However, critics questioned whether the negotiations between Indiana officials and Carrier executives could set a precedent for companies threatening to leave the country unless they are granted taxpayer-funded concessions.
Source: Washington Examiner