Trump plans to personally recruit manufacturers to move to US
Summary
GOP nominee uses tax breaks, tariff threats to try to persuade foreign companies to shift production.Donald Trump is pitching himself as a national economic development recruiter, wooing foreign manufacturers with tax breaks and federal land while using tariffs to punish companies that don’t move production here.
Trump, in a speech Tuesday in Savannah, Ga., is expected to say that in a second term he wants the U.S. to take other countries’ jobs and factories, according to a senior adviser. The adviser said Trump plans to personally recruit foreign companies and ask them what they need to shift their manufacturing to the U.S.
Trump’s approach combines some traditional Republican themes—light regulation and low corporate taxes—with his own embrace of high tariffs and assertive government involvement in businesses’ location decisions.
He has already called for a 15% tax rate for companies that make products in the U.S., effectively reviving a deduction that he and the Republican-controlled Congress eliminated in 2017. Typically, foreign companies pay U.S. taxes on the income they earn in the U.S. and can get many of the same incentives that U.S.-based companies can get; Trump hasn’t detailed how his new proposal would work.
In addition to the tax breaks, he has called for across-the-board tariffs of 10% to 20%, which would provide an advantage to some domestic manufacturers but would likely raise consumer prices on imported goods. The tariffs could also spark retaliation by trading partners.
As with many government subsidies and incentives, Trump’s approach risks putting public money into private projects that would happen anyway.
The Trump strategy would mark a shift from the Biden administration’s efforts to boost American manufacturing. During the past four years, Biden has embraced a form of industrial policy, whereby the U.S. uses government resources in targeted sectors with strategic importance.
Under Biden, the U.S. has been pouring money into semiconductor companies and offering generous tax credits for clean energy projects, and Biden frequently points to the jobs created in those industries.
Trump has called for repealing those clean-energy subsidies, while his Democratic rival, Vice President Kamala Harris, cast the tiebreaking vote in 2022 to enact them. She supports raising the corporate tax rate to 28% from 21% and is planning a Wednesday speech in Pittsburgh focused on the economy.
Trump’s personal involvement in business recruiting carries some risk. During his first term, he touted planned Foxconn investments in Wisconsin, but the liquid-crystal-display project has been scaled back significantly. Also, he can serve only one more four-year term under the Constitution, so companies moving based on his promises and policies have to hope that those would continue after he leaves office.
The former president has also been taking warning shots at U.S. companies that are moving jobs to other countries. On Monday, Trump threatened to slap 200% tariffs on farm-equipment maker Deere for any products imported from Mexico.
Alex Leary contributed to this article.
Write to Richard Rubin at richard.rubin@wsj.com
