US POLITICS: ANALYSIS
image

Donald Trump

Donald Trump begins ‘thank you tour’ by visiting Indiana to celebrate Carrier jobs deal

Republican businessman toured the plant in Indianapolis and shook hands with workers on an assembly line

PUBLISHED : Friday, 02 December, 2016, 7:46am
UPDATED : Friday, 02 December, 2016, 10:58pm

President-elect Donald Trump warned on Thursday that US companies would face “consequences” for outsourcing jobs abroad, as he touted his early success in persuading an air conditioner maker to keep about 1,000 jobs in the US rather than move them to Mexico.

“Companies are not going to leave the United States anymore without consequences. Not going to happen,” the Republican said on a visit to a Carrier plant in Indianapolis.

He has signalled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives
Senator Bernie Sanders

Trump, who takes office on January 20, did not say what the consequences would be, but he frequently threatened during the election campaign that his administration would put a 35 per cent import tariff on goods made by American manufacturers that moved jobs offshore.

It is unclear what steps would have to be taken by federal authorities before Trump could retaliate against individual companies shifting jobs abroad.

Trump also did not address whether Carrier’s parent company, United Technologies, would face any consequences for continuing with plans to move 1,300 other Indiana jobs to Mexico.

Trump made keeping jobs in the US one of the main issues of his campaign and frequently pilloried Carrier for planning to move production to Mexico as he appealed to blue-collar voters in the Midwest.

Apparently under pressure from Trump, Carrier announced this week it had agreed to keep more than 1,000 jobs at the plant and at its headquarters, while still planning to move more than 1,000 other US jobs to Mexico.

Trump said his negotiations with the maker of air conditioning units were a model for how he would approach other US businesses that are tempted to move jobs overseas to save money.

He pledged to create a healthy environment for business through lower taxes and fewer regulations.

“I just want to let all of the other companies know that we’re going to do great things for business. There’s no reason for them to leave anymore,” Trump said.

If that approach did not work, there would be penalties, Trump warned.

The deal marked a quick win for Trump, who has spent most of his time in New York since the November 8 election building his team ahead of January’s inauguration, when he will succeed Democratic President Barack Obama.

Trump toured the plant in Indianapolis and shook hands with workers on an assembly line. Some workers yelled: “Thank you Mr Trump” and “Thanks Donald” as he greeted them.

Carrier confirmed that Indiana agreed to give the company US$7 million in tax incentives. A source briefed on the matter said the tax incentives were over 10 years and the company had agreed to invest US$16 million in the state, where Trump’s vice-president-elect, Mike Pence, is governor.

Carrier still plans to move 600 jobs from the plant to Mexico, the Wall Street Journal said.

Billionaires’ club: Donald Trump’s cabinet shapes as the wealthiest in modern history

US Senator Bernie Sanders, who lost the Democratic nominating race to Hillary Clinton, said the Carrier deal was incomplete and left the incoming Trump administration open to threats from companies.

“Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signalled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives,” Sanders wrote in a Washington Post opinion piece on Thursday.

He noted that Trump had originally said he would save 2,100 jobs that Carrier planned to move to Mexico.

“Let’s be clear: It is not good enough to save some of these jobs,” Sanders said.

Despite Trump’s deal, employers elsewhere in Indiana are laying off five times that many workers because of foreign competition.