President-elect Donald Trump on Thursday warned that the government would punish companies seeking to move operations overseas with “consequences,” setting the stage for an unusual level of intervention by the White House into private enterprise.
“Companies are not going to leave the United States any more without consequences. Not going to happen,” he said. “They can leave from state to state, and negotiate deals with different states, but leaving the country will be very, very difficult.”
During the presidential campaign, Mr Trump repeatedly threatened to slap tariffs on firms choosing to move to countries where labour costs are cheaper. His latest comments – his first major public remarks since winning the White House – came as he announced a deal with Carrier to prevent jobs being moved to Mexico. The Republican billionaire made saving the plant a central promise of his campaign, and has now confirmed a deal to keep 1,100 jobs there – although hundreds of workers still face unemployment.
Indiana state officials have agreed to give United Technologies Corp, which runs the plant, $7m worth of tax breaks over 10 years. Vice President-elect Mike Pence said the move will keep the jobs in “the heart of the heartland”.
He said: “This is a great day for Indiana and it’s a great day for working people all across the United States of America.”
Mr Trump’s supporters have described the deal as the first tangible part of his plan to increase employment. But liberal Senator Bernie Sanders, who was up against Hillary Clinton for the 2016 Democratic presidential nomination, said the deal should worry Americans. Carrier “took Trump hostage and won,” he wrote in an op-ed for The Washington Post. Mr Sanders said the incoming President had “endangered” other US jobs “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”.
Mr Trump also is under pressure to prevent other job cuts across the state, with several other factories in Indiana set to close. More than five million manufacturing jobs have been wiped out across the US since 2000, with Indiana alone losing about 150,000 factory roles.
Mr.Trump repeatedly pointed to Carrier’s planned move to Mexico as a prime example of the perils of globalization: The company told Indiana officials it would save $65 million a year by shifting production to a 645,000-square-foot factory under construction outside Monterrey, where wages are far lower.
Carrier rejected a tax incentive package the state offered earlier in the year to keep the Indianapolis plant open. But that was before Trump won the election and Indiana Gov. Mike Pence became the vice president-elect.