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

Matt Posky
by Matt Posky

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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Imnormlurnot Imnormlurnot on Aug 23, 2020

    After reading most of these comments, I think when it comes to politics and economics, most of us can drive a car with an automatic transmission.

    • See 3 previous
    • Imnormlurnot Imnormlurnot on Aug 24, 2020

      @Old_WRX I did the same; changed from parents pickup with 3 on a tree, to parents Caprice with power brakes. The brakes were impressive: impressed the steering wheel into my face. Only my ego was bruised.

  • Jkross22 Jkross22 on Aug 24, 2020

    For those who wrote any of the 118 comments, I have a question for you all: Was there any argument that changed your mind? I read a few comments and skipped the rest because why bother anymore. I still clicked, so hopefully Interscope or whoever now owns this property made $0.025 off of my eyeballs, but I've spent more time typing this comment than I did on the article.

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    • Lou_BC Lou_BC on Aug 25, 2020

      @jkross22 - I don't view it as changing my mind but "OPENING" my mind. Understanding everyone's opinions about a subject is much more important than agreeing with that opinion. I'm sure that I'm in the minority when it comes to that point.

  • Lynchenstein @EBFlex - All ICEs are zero-emission until you start them up. Except my mom's old 95 Accord, that used to emit oil onto the ground quite a lot.
  • Charles The UAW makes me the opposite of patriotic
  • El scotto Wranglers are like good work boots, you can't make them any better. Rugged four wheel drive vehicles which ironically make great urban vehicles. Wagoneers were like handbags desired by affluent women. They've gone out of vogue. I can a Belgian company selling Jeep and Ram Trucks to a Chinese company.
  • El scotto So now would be a good time to buy an EV as a commuter car?
  • ToolGuy $1 billion / 333.3 million = $3 per U.S. person ¶ And what do I get for my 3 bucks -- cleaner air and lower fuel prices? I might be ok with this 🙂🙂
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