Speaking in Indiana, the first of several stops on his victory lap across the US, President-elect Donald Trump warned companies of ‘consequences’ if they were to withdraw their operations from the US. At the rally, he took credit for saving 1,000 jobs at Carrier Corp, an air-conditioning manufacturing business which had planned to move operations to Mexico. He hailed his negotiations with Carrier Corp as a model for his stance towards US businesses seeking to leave the US, saying that “we’re going to treat them well and… there will be consequences”. One of his proposals was to tax these exiting businesses “very heavily at the border if they want to leave”.
Mr Trump had repeatedly promised on his campaign trail that he would stop American jobs from leaving the country, and caught onto the Carrier situation through a news programme. He negotiated a deal with Carrier Corp, promising $7 million worth of tax breaks over 10 years in exchange for retaining 800 union workers, whose jobs would have been moved to Mexico, and 300 research and headquarters positions. According to a statement from Carrier, the tax incentive deal is conditional “upon factors including employment, job retention and capital investment.” Close to 1,300 jobs will also still be outsourced to Mexico.
Former Democratic presidential candidate Bernie Sanders has criticised the Carrier deal as contrary to Mr Trump’s campaign promise, arguing in a Washington Post op-ed that he had instead endangered jobs by sending the message to companies that “they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives”.