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| Vowing to Squeeze Businesses, Trump Has Tactics Challenged | |
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| WASHINGTON — Donald Trump isn’t done taunting corporate America. | WASHINGTON — Donald Trump isn’t done taunting corporate America. |
| After last week’s Rust Belt victory lap, where he claimed credit for persuading Carrier to keep perhaps 1,000 factory jobs in Indiana, Mr. Trump took to Twitter Sunday morning and warned of retribution for other companies contemplating moving production abroad. | After last week’s Rust Belt victory lap, where he claimed credit for persuading Carrier to keep perhaps 1,000 factory jobs in Indiana, Mr. Trump took to Twitter Sunday morning and warned of retribution for other companies contemplating moving production abroad. |
| But even as Mr. Trump tries to put the bully in bully pulpit, the question of whether his approach is smart economic policy, improvised showmanship or a bit of both is another story. | But even as Mr. Trump tries to put the bully in bully pulpit, the question of whether his approach is smart economic policy, improvised showmanship or a bit of both is another story. |
| Indeed, his tactics have drawn criticism from both the left and the right, with a range of experts saying his approach may be ineffective at best, and crony-capitalist and caudillo-like at worst. | Indeed, his tactics have drawn criticism from both the left and the right, with a range of experts saying his approach may be ineffective at best, and crony-capitalist and caudillo-like at worst. |
| “Blackmail is implicit in this approach, and it’s dangerous,” said Tyler Cowen, a conservative free market-oriented economist who teaches at George Mason University. “It’s a lot of political theater, but that’s not even my biggest criticism. Trump is negotiating with individual businesses outside of the rule of law and bureaucratic procedure.” | “Blackmail is implicit in this approach, and it’s dangerous,” said Tyler Cowen, a conservative free market-oriented economist who teaches at George Mason University. “It’s a lot of political theater, but that’s not even my biggest criticism. Trump is negotiating with individual businesses outside of the rule of law and bureaucratic procedure.” |
| On Friday, Mr. Trump took aim at Rexnord, another Indianapolis manufacturer that disclosed plans in October to move to Mexico. “No more!,” he tweeted, helping to push Rexnord’s stock down 8 percent for the week. | On Friday, Mr. Trump took aim at Rexnord, another Indianapolis manufacturer that disclosed plans in October to move to Mexico. “No more!,” he tweeted, helping to push Rexnord’s stock down 8 percent for the week. |
| According to Mr. Trump, the penalty would be a 35 percent tariff imposed on goods that companies ship back into the United States after they move production abroad. It is doubtful that Mr. Trump would have the legal authority to punish individual companies without congressional action. But he is also promising a broader overhaul of corporate taxes and the elimination of a host of regulations that he sees as stifling American companies, in addition to individual incentive packages like the $7 million one that Carrier received. | According to Mr. Trump, the penalty would be a 35 percent tariff imposed on goods that companies ship back into the United States after they move production abroad. It is doubtful that Mr. Trump would have the legal authority to punish individual companies without congressional action. But he is also promising a broader overhaul of corporate taxes and the elimination of a host of regulations that he sees as stifling American companies, in addition to individual incentive packages like the $7 million one that Carrier received. |
| Mike Konczal, an economist at the left-leaning Roosevelt Institute, said he also thought Mr. Trump’s approach was doomed to failure, especially if he kept his campaign pledge to reduce taxes on corporations and investors. | Mike Konczal, an economist at the left-leaning Roosevelt Institute, said he also thought Mr. Trump’s approach was doomed to failure, especially if he kept his campaign pledge to reduce taxes on corporations and investors. |
| “Cutting taxes for shareholders will destroy more factories than whatever he saves by jawboning companies from the bully pulpit,” Mr. Konczal said. And incentives like the ones Carrier received only forestall the inevitable shift by multinational giants to low-cost locales like Mexico and Asia. “They will just go later after pocketing some money,” Mr. Konczal said. | “Cutting taxes for shareholders will destroy more factories than whatever he saves by jawboning companies from the bully pulpit,” Mr. Konczal said. And incentives like the ones Carrier received only forestall the inevitable shift by multinational giants to low-cost locales like Mexico and Asia. “They will just go later after pocketing some money,” Mr. Konczal said. |
| Making deals with big business may prove much harder than Mr. Trump is willing to acknowledge. After all, he held off on using the stick with Carrier, and handed over $7 million worth of carrots, but the company only gave Mr. Trump half of what he wanted, with 1,000 Indiana jobs still leaving for Mexico. | Making deals with big business may prove much harder than Mr. Trump is willing to acknowledge. After all, he held off on using the stick with Carrier, and handed over $7 million worth of carrots, but the company only gave Mr. Trump half of what he wanted, with 1,000 Indiana jobs still leaving for Mexico. |
| Moreover, Mr. Trump is pushing back against tectonic economic forces that show no sign of easing. Besides the continuing loss of factory jobs to automation, Carrier is far from unique in shifting blue-collar jobs to places like Mexico, even as it keeps white-collar functions like sales and research and development in Indiana. | Moreover, Mr. Trump is pushing back against tectonic economic forces that show no sign of easing. Besides the continuing loss of factory jobs to automation, Carrier is far from unique in shifting blue-collar jobs to places like Mexico, even as it keeps white-collar functions like sales and research and development in Indiana. |
| “There isn’t a silver bullet,” said Steven Rattner, a veteran financier and Democrat who led President Obama’s successful effort to rescue the auto industry in 2009. “And what’s ironic is that there isn’t a single thing in Donald Trump’s campaign platform that would help people hurt by these trends.” Mr. Rattner is also a contributing opinion writer for The New York Times. | “There isn’t a silver bullet,” said Steven Rattner, a veteran financier and Democrat who led President Obama’s successful effort to rescue the auto industry in 2009. “And what’s ironic is that there isn’t a single thing in Donald Trump’s campaign platform that would help people hurt by these trends.” Mr. Rattner is also a contributing opinion writer for The New York Times. |
| Still, whether it’s a smart strategy or not, it is clear Mr. Trump is planning more Carrier-like standoffs after he moves into the Oval Office on Jan. 20. | Still, whether it’s a smart strategy or not, it is clear Mr. Trump is planning more Carrier-like standoffs after he moves into the Oval Office on Jan. 20. |
| “This is no one-off,” he said in an interview with The Times after touring the Carrier factory floor in Indianapolis on Thursday and greeting cheering workers. “That’s one of the reasons I’m here as opposed to doing it from my lobby in Manhattan.” | “This is no one-off,” he said in an interview with The Times after touring the Carrier factory floor in Indianapolis on Thursday and greeting cheering workers. “That’s one of the reasons I’m here as opposed to doing it from my lobby in Manhattan.” |
| Rather than tax breaks or tariffs on a case-by-case basis, perhaps the best argument for Mr. Trump’s tactics are that they may prompt a rethinking of corporate responsibility among executives, said Justin Wolfers, an economist and New York Times contributor who teaches at the University of Michigan. | Rather than tax breaks or tariffs on a case-by-case basis, perhaps the best argument for Mr. Trump’s tactics are that they may prompt a rethinking of corporate responsibility among executives, said Justin Wolfers, an economist and New York Times contributor who teaches at the University of Michigan. |
| “The question is what’s the game?” Mr. Wolfers said. “If it’s about changing norms, and saying private enrichment at the expense of the broader public good is no longer socially acceptable, that’s important.” | “The question is what’s the game?” Mr. Wolfers said. “If it’s about changing norms, and saying private enrichment at the expense of the broader public good is no longer socially acceptable, that’s important.” |