President-elect Donald Trump fired another warning shot Sunday at U.S. companies considering moving their operations out of the country, threatening “retributions or consequences” such as a hefty border tax if they do.
Trump’s comments follow his direct intervention in an Indiana factory owned by Carrier, which makes heating and air-conditioning units, where production was scheduled to shift to Mexico. Trump announced last week that he had negotiated a deal to keep the plant in the state. Indiana promised to provide Carrier about $7 million in incentives, while the company would invest $16 million in the factory over the next two years.
About 800 jobs that had been slated to move to Mexico will remain at the plant, according to a person familiar with the negotiations. About 300 to 600 Carrier positions — including 700 at one of the company’s other factories in the state — will still be cut.
Trump's messages Sunday morning drew skepticism from some Republicans such as Sen. Ben Sasse (Neb.), who have generally favored a hands-off approach to the economy.
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?— Ben Sasse (@BenSasse) December 4, 2016
Still, Trump advisers said he would be deeply involved in day-to-day corporate decisions like perhaps no other Republican before.
On the stump, Trump espoused an aggressively protectionist stance toward international trade, and his skepticism of the benefits of globalization resonated with many middle-class voters who bore the brunt of its downside.
But since his election, his advisers have softened some of his most heated rhetoric. Trump’s picks for treasury secretary, Steven Mnuchin, and commerce secretary, Wilbur Ross, said that they would pursue bilateral trade agreements with other countries but remained wary of sweeping regional deals. Ross also said that blanket double-digit tariffs on goods from Mexico and China — which many economists warned could spark a damaging trade war — would only be used as a last resort.
But Trump’s comments Sunday indicate that he is not backing away from one key pledge: to punish companies that offshore jobs.
“We're living through the greatest jobs theft in the history of the world,” Trump said last week.
Trump celebrated the Carrier deal with a tour of the factory last week, followed by a rally in Cincinnati to kick off his “thank you” tour. On Capitol Hill, some conservatives criticized the deal as a government distortion of the free market, while liberal lawmakers called the tax breaks a corporate subsidy. But business groups generally welcomed the move.
“Now, hundreds of Indiana workers will now keep good jobs, preserving their place in the middle class,” Scott Paul, president of the Alliance for American Manufacturing, said in a statement Friday. “While inducements and high-level interventions aren’t the most efficient ways to keep jobs here, they’re sometimes absolutely necessary.”