Trump Offers Credits for Companies That Bring Back American Factory Jobs, Tariffs for the Rest

Keen to sweep as much attention away from the 2020 Democratic National Convention as possible, President Donald Trump campaigned in Old Forge, PA while Joe Biden accepted the Democratic nomination at a largely virtual event. You’ll be forgiven for not having watched either, as both amounted to little more than bashing the opposing side with nary a hint of actual policy. But Trump came the closest to offering something truly substantive, reiterating threats to companies to bring factory jobs back to the U.S. or suffer the consequences.

The president insisted that manufacturers would soon find themselves in a situation that benefits America whether they complied or not. “We will give tax credits to companies to bring jobs back to America, and if they don’t do it, we will put tariffs on those companies, and they will have to pay us a lot of money,” Trump said during the event.

Considering his trade policy history, the odds of this being an empty threat are slight. The U.S. enacted sweeping tariffs against China after the administration leveled accusations of rampant intellectual property theft and strong-arming corporations (especially automakers) into entering into joint ventures that required them to partner with Chinese entities and build within the Asian country’s borders in order to sell their wares.

Unfortunately, Trump also adhered to this week’s political theme of offering voters as little information as possible. No details were offered on the alleged credits program or how the tariffs would be utilized to discourage companies from offshoring jobs. But trade adviser Peter Navarro suggested to Bloomberg that the threats themselves could be enough to encourage the desired change.

“The beauty of the Trump tariffs is that they represent a powerful inducement for investment in domestic production by both American companies that have offshored our factories and foreign companies that want to sell into the U.S. market,” he told the outlet on Friday.

“We have seen this lesson time and again during this administration with the steel and aluminum tariffs, with the threat of auto tariffs, and with the China tariffs,” Navarro continued. “Tariffs mean more American jobs and factories.”

While we could have automatically assumed more tariffs (mainly against China) if Trump wins a second term, it’s nice to hear any politician give their two cents on an issue before an election. By contrast, the Biden campaign has been criticized for issuing conflicting information on how it would handle China if the former vice president is elected.

Most are under the assumption that the Democrats would attempt to improve relations with the PRC and rebuild trade — following a similar diplomatic approach as the Obama administration’s. But Biden’s rhetoric on China is far less empathetic now than it was when the Trump administration first took over. We should have a better understanding on the Dems’ trade policies as November nears, and are looking forward to seeing what it has in store for the automotive sector, specifically.

[Image: Joseph Sohm/Shutterstock]