Trump Outlines Manufacturing Push --- Plan includes tax breaks, tariff threats in bid to shift more production to U.S.

"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 to the U.S.

"Foreign nations will be worried about losing their jobs to America," he said in a speech in Savannah, Ga., promoting what he called a New American Industrialism.

"It won't even be difficult. Your only worry will be deciding which job to take," he told supporters.

Trump said in a second term as president he would appoint a manufacturing ambassador to attract foreign companies to the U.S. as he uses a carrot-and-stick approach to bring jobs and factories stateside. A senior adviser said Trump plans to personally recruit foreign companies and ask them what they need to shift their manufacturing to the U.S.

"When they have to pay tariffs to come in but they have incentive to build here, they're going to come roaring back," Trump said in his speech, arguing that the U.S. would become a hub for robotics, shipbuilding and auto manufacturing.

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 would allow faster write-offs of business investments for tax purposes, bringing back a tax break that his 2017 tax law put in place but also scheduled to phase out. And 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.

Trump hasn't detailed how his new 15% tax-rate proposal would work, though he also said Tuesday that he would create special zones on federal land with low taxes and lighter regulation.

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. Trump said Tuesday that he would impose 100% tariffs on cars imported from Mexico -- a move at odds with the trade deal he negotiated in his first term.

If they passed legal muster in the U.S., Trump's tariffs could also spark retaliation by trading partners, hurting some of the exports Trump wants to promote.

The Trump strategy would mark a shift from the Biden administration's efforts to boost American manufacturing. Under President Biden, the U.S. has been pouring money into semiconductor companies and offering generous tax credits for clean-energy projects.

Trump has called for repealing at least some of 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 planned a Wednesday speech in Pittsburgh focused on the economy. Harris allies have called Trump's economic policies nonsensical and harmful to Americans.

"He says things off the top of his head that tend to be ridiculous if not insane," billionaire investor Mark Cuban said on a call with reporters organized by the Harris campaign.

Senate Minority Leader Mitch McConnell (R., Ky.) told reporters Tuesday he was "not a fan of tariffs. They raise the prices for American consumers."

Economists have said the proposed tax breaks fall far short of what companies need to move back, while tariffs would exacerbate inflation as companies pass on costs to consumers. The U.S. Trade Representative and Commerce Department, as well as the foreign service within the State Department, already have officials reaching out to companies including manufacturers, so a manufacturing ambassador would likely amount to a figurehead position.

Trump didn't elaborate how special industrial zones would work. The U.S. already has free-trade zones allowing companies to import products for re-export tax-free. Economists have said that finding appropriate land near ports, rail yards and other transportation hubs might be challenging.

As a share of the economy, manufacturing slid slightly to 10.3% in 2023 from 10.9% in 2016. That is even as private-sector manufacturing employment has rebounded from 2010 lows to around 12.9 million in August." [1]

1. U.S. News: Trump Outlines Manufacturing Push --- Plan includes tax breaks, tariff threats in bid to shift more production to U.S. Rubin, Richard; Deng, Chao.  Wall Street Journal, Eastern edition; New York, N.Y.. 25 Sep 2024: A.4.