You may have heard that Trump negotiated with a company in Indiana and got them to agree to keeping 1000 jobs in the state. That sounds super great right? Let’s take a closer look.
It was unclear whether 1,000 new jobs were being saved in the U.S. or whether that figure included 400 jobs the company agreed to preserve earlier this year under pressure from Indiana officials.
It’s also not clear how much personal involvement Trump had in the deal, versus Pence or other officials
CNBC reported the deal includes new inducements from the State of Indiana, the sort of package typically negotiated by a governor and not a president or president-elect.
Trump also promised to renegotiate the North American Free Trade Agreement, threatening to impose punitive tariffs on goods imported from Mexico. These actions could make it uneconomical for Carrier to shift production to Mexico and bring the completed furnaces back across the border.
It remains unclear whether Trump will deliver on these promises, as he and his allies have been quieter about them since the election.
Economists are likely to view the deal with skepticism.
While it is common practice for governors and local officials to offer special treatment to companies that locate facilities in their jurisdictions, many economists say that doing so amounts to government interference in the free market.
These deals, they say, discourage companies from making the most productive and efficient decisions from a business point of view, while draining public coffers through tax breaks and other favors.
And more, from Sen. Bernie Sanders
In exchange for allowing United Technologies to continue to offshore more than 1,000 jobs, Trump will reportedly give the company tax and regulatory favors that the corporation has sought. Just a short few months ago, Trump was pledging to force United Technologies to “pay a damn tax.”
Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How’s that for standing up to corporate greed? How’s that for punishing corporations that shut down in the United States and move abroad?
Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives.
But after running a campaign pledging to be tough on corporate America, Trump has hypocritically decided to do the exact opposite. He wants to treat corporate irresponsibility with kid gloves.
Conclusion: Not a very good sign. Trump showed that companies can threaten to move their jobs overseas and then get tax breaks. He sure is showing how tough he can be on business and how well he will bring jobs to the middle class.