President-elect Donald Trump on Sunday renewed his hard line on U.S. companies that plan to shift operations abroad, using a series of early-morning Twitter posts to warn again that “there will be a tax” of 35 percent levied against goods moved “back across the border” for sale.
The Twitter messages came days after Trump went to Indiana to celebrate a decision by the heating and cooling giant Carrier to keep in that state about half of the 2,000 jobs it had planned to eliminate as it moved production to Mexico.
But in the case of Carrier, it was not a large tariff that prompted it to retain the U.S. jobs. It was $7 million in incentives from the state of Indiana, the sort of corporate giveaway that Trump railed against during the campaign.
Moreover, replicating the Carrier success would be difficult on a large scale – a U.S. president has limited tools to counter the global economic forces that prompt companies to shift production to lower-wage countries. And because taxes cannot be directed at specific companies, any tariffs would have to be broad, and therefore broadly painful.
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In his Twitter posts, Trump said: “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!”
A 35 percent tariff, he said, “will make leaving financially difficult, but these companies are able to move between all 50 states, with no tax or tariff being charged.”
“Please be forewarned prior to making a very expensive mistake!” he added. “THE UNITED STATES IS OPEN FOR BUSINESS.”
Vice President-elect Mike Pence played down the punitive aspects of Trump’s proposals in television interviews Sunday morning, dismissing the suggestion that Trump was picking “winners and losers” or that he had inappropriately intervened in the Carrier case.
“No, I don’t think it’s picking winners and losers at all,” Pence said on ABC’s “This Week.” “What the president-elect did with Carrier was simply reach out one American to another and ask them to reconsider.”