President Donald Trump is moving faster than the speed of light. He’s working on one campaign promise after another – leaving no stone unturned. So it was perhaps fitting that our new President began his week talking about jobs, jobs, jobs. It’s a meeting worth a quick review.
American business leaders from across the economic spectrum were summoned to the White House to meet with the businessman-in-chief. During that meeting, Trump stated his intention to impose a “substantial border tax” on any companies that move their manufacturing out of the country.
He also said there would be tax benefits to enterprises that keep their manufacturing operation inside the United States. This, along with the fact that he plans to cut 75% of government regulations, was meant to give businesses a greater incentive to keep their operations in the United States.
In attendance were Tesla CEO Elon Musk, CEO of Lockheed-Martin Marilyn Hewson, Mark Fields of Ford Motor Company, and several others. Because Trump says what he means, his statements at the meeting were reflective of his message on the campaign trail. You remember – that’s when he promised to keep American jobs in America.
Now, to accomplish this, Trump is using both the carrot and the stick.
This approach is both positive and problematic. One difficulty is using the threat of a border tax to keep companies from doing what they need to do to operate efficiently. The real job of the government is to get out of the way and allow businesses to operate effectively and profitably.
Contrary to what President Trump says, it’s not outsourcing and free trade that are taking most of the jobs. It’s automation. Manufacturers are finding ways to replace workers with machines that can perform the same tasks.
If companies are not allowed to manufacture products outside of the United States, we will have to pay more for the products we buy on a regular basis. Outsourcing makes life more affordable for the average American.
On the other hand, what’s right about Trump’s approach is that he will lower taxes and remove unnecessary and expensive regulations. Our corporate tax rate is one of the highest in the world. It’s been a major issue for American business for decades.
Also, former President Barack Obama imposed over 20,000 regulations on business during his presidency. Many of the rules are restrictive and unnecessary. They make it harder for both large and small businesses to operate.
If the 45th President wants to keep businesses in the United States, the carrot is much more fitting than the stick. It’s the high taxes and oppressive regulations that are causing American companies to go overseas in the first place. Instead of using threats, the President should just address the issue that is making companies leave.