What exactly is the point of having a free trade agreement if you have provisions to slap tariffs slapped on companies in Mexico?
I mean you could do some tax penalties for it, but slapping tariffs as part of a free trade agreement seems absolutely silly.
Seems more of a stay of execution for the Carrier workers than a victory for Trump administration.
Let’s revisit when the details are finalized and then a year or two from now to see if those ‘saved’ jobs are still in the US.
Something to consider. The workers’ unions were not involved in the negotiations.
Lets see how well a cut in pay and reduction in benefits goes down.
I can hear it now on Fox News: “Trump administration saves US Carrier jobs but Democrat union management tanks the deal!”
No, not tariffs on Mexican companies, tariffs on American companies that move production.
Can Carrier US establish a new company in Mexico called El Carrier Mexico, then build stuff there and sell it here?
And just for a little extra cover, establish a holding company for Carrier International in Dublin or some other tax friendly off shore location.
Isn’t that how it’s been done for years and years now?
Sure they can. The executives fire themselves as well as their employees and a new company with Mexican executives and Mexican workers opens in Mexico.
Oh wait, the company exists as an HQ only in the US with the same executives as the old company, with a production facility in Mexico where the old company had one in Indiana? Well then. Under President Trump’s discretion granted to him by the Save American Jobs Act passed in 2017, Trump slaps 45% tariffs on all products coming into the country produced by the new company, as well as another 45% for trying to game the system.
See, that’s the weak point in those plans and why it’s easy to tell what’s going on. The top guys keep their jobs. Not hard to follow them and just consider whatever “new” company they start to legally be the same as the old company for purposes of the Save American Jobs Act. If a CEO wants to move a company overseas, he has to lose his job along with everyone else, then we’ll consider it a new company.
Wouldn’t that cost be passed on to the consumer? Then the consumer stops buying that product because it’s too expensive. The company folds due to lack of sales. The entire factory in Mexico closes, and the HQ here dissolves. The workers in Mexico no longer purchase American made goods that are exported to Mexico, and then THOSE companies suffer. I don’t see any way around this.
Maybe Carrier has more customers than just the ones in the US. I would think that HVAC is something the whole world would be into.
True, I also envision a company subjected to these tariffs would just stop selling in the US. There are an awful lot of people in the world that are NOT the US. Still harmful to the US consumer, as now a product is no longer available.
Nonsense. As in most consumer good fields, there are plenty of manufacturers and losing one for any reason has negligible effect on consumer choice. The others absorb the market share and only die-hard brand aficionados are “harmed.”
Carrier probably did not get any incentives, UT their parent company probably got either incentives, or anti incentives. What carrier may have received was the ghost of Christmas future and yada yada.
Sounds to me like a good incentive not to open a new business in the US.
Only if your business starts out big. Not sure how many small businessmen are going to want to try to start out in a notoriously corrupt country where every possible obstacle is put in your way by capricious local officials that need to be bribed and where you’ll have to rely on local talent to get going.
But sure, if the next Tesla wants to try to get underway in Thailand, more power too them. But we know that’s now usually how it works. The Teslas of the country start out with an idealistic CEO more interested in innovation than profit, but 25 years from now if all goes well they will be a profitable, huge company with factories all over the world, which is fine because most of the cars they produce for the US will be made in the US. And that’s about the point where management is going to start thinking, “you know, we could make even more money if we close most of those US plants.”
Are you implying the only countries
In the world are the US and assorted “notoriously corrupt” backwaters?
The cost is of course passed on to the consumer. But chances are, the company does not fold because it remains in the US. Moving a plant is a big investment, only done because it expects to pay major dividends in the future through cost savings. It’s not dying companies that move to foreign countries, it’s profitable ones looking to be more profitable.
I don’t question the Economics 101 of the issue and I don’t deny that ANY protectionist policy is going to have costs. But when you’ve got whole areas’ economies being hollowed out over the last 20 years or so, that’s become a bigger issue than the CPI.
Of course not, but it’s not like US companies are clamoring to move to France. Nor are there many American entrepeneurs thinking that it would be a better idea to start their company outside the US.
You serious?
What makes you think I’m not?
Trump cares nothing for the blue collar crowd, he just used them to get votes.
No doubt. But unlike the last ten Democrats, he’s serious about protectionism. The others just used it as campaign talk. Lying has a price. Us Republicans will pay for all the lies Trump ends up telling. Life is actually fair sometimes.