Former President Donald J. Trump outlined his vision for a manufacturing renaissance during his closing economic arguments ahead of the election, repeating a familiar pitch: “Make goods in America.” and enjoy lower taxes, or face steeper tariffs.”
Mr. Trump’s pitch combines the carrot-and-stick approach he called “America First” during his first term, which imposed tough tariffs on allies and competitors while also cutting taxes on American companies.
In a speech in Savannah, Georgia, on Tuesday, Mr. Trump signaled that he intended to go far beyond his initial approach and embrace what he dubbed a “new American industrialism.”
The former president has proposed creating “special” economic zones on federal land, which he said would have lower taxes and less regulation. He called for companies that make products in the United States to pay a corporate tax rate of 15%, down from the current 21%, regardless of where their headquarters are located. Companies attempting to ship cars and other products to the United States from countries such as Mexico would face tariffs as high as 200 percent.
But Mr. Trump’s vision of a “manufacturing renaissance” comes at a time when Americans are increasingly wary of foreign investment, especially from Asia. And while he imposed steep tariffs during his presidency, his efforts to prevent American companies from moving production overseas faced the harsh reality of low-wage labor and technological progress in other countries.
During Trump’s tenure, manufacturing employment was roughly flat before the pandemic and was declining when he left office. In January 2021, the American Manufacturing Alliance said his promises about reviving the industry were “mostly rhetoric.”
Mr. Trump’s talk about strengthening U.S. manufacturing is similar in part to what President Biden has been pushing for the past few years. The Biden administration is adopting a form of industrial policy not seen in decades, backing legislation that would funnel billions of dollars to specific industries such as semiconductors, clean energy and electric vehicles.
But Mr. Trump’s approach differs in many ways from that of Mr. Biden and his Democratic opponent, Vice President Kamala Harris.
Harris has called for higher taxes on businesses, but has said little about how or whether tariffs will be used to influence manufacturing decisions. But she spoke about the importance of the Inflation Control Act, the tax and climate bill that Democrats passed in 2022. She is attracting foreign investment given the favorable tax credits available to support the development of the clean energy industry.
Mr. Trump wants to repeal the law and create new tax breaks for specific industries. In his speech, he said companies that manufacture products in the United States will pay a 15% tax rate.
Mr. Trump predicted that manufacturing from China, South Korea and Germany would flow to the United States, saying, “Foreign countries will be concerned about losing jobs to the United States.”
Trump’s 2017 tax law made U.S. corporate tax rates more competitive compared to other countries and helped encourage overseas investment. But the tariffs he imposed on imports from China have increased investment in Mexico as companies invest there to avoid the tariffs and gain access to the U.S. market.
Trump appeared to acknowledge the development this week, saying he would impose tariffs of at least 100% on companies that make cars and other products in Mexico and export them to the United States.
At a campaign event in Pennsylvania on Monday, the former president singled out farm equipment maker Deere. The company announced earlier this year that it would move some production from Iowa to Mexico, threatening the jobs of more than 200 employees.
“We’re putting John Deere on notice right now: If they do that, they’re going to impose a 200% tariff on everything they want to sell to the United States,” Trump said.
A Deere representative did not address Trump’s comments, but said the company is “constantly reviewing its production efficiencies” to “take advantage of America’s highly skilled manufacturing workforce.”
This approach is reminiscent of his first term, when he often shamed companies with plans to move production overseas and threatened them with tariffs and boycotts. In most cases, this strategy has had limited success.
In 2016, before he took office, Trump pressured United Technologies, the parent company of a major heating and cooling carrier, to keep its Indianapolis factories open and not move jobs to Mexico. The company initially agreed to keep the plant open, saving more than 700 jobs. But in 2017 and 2018, Carrier cut about 500 jobs from that factory and moved the role to Mexico.
Trump slammed Harley-Davidson in 2018 when the company announced it would move some manufacturing overseas to avoid tariffs that Europe imposed on American products in retaliation for the president’s steel and aluminum tariffs. . The motorcycle company moved forward with plans to build a factory in Thailand and close a factory in Kansas City, Missouri.
And in 2019, Trump attacked General Motors after it announced plans to close its Lordstown, Ohio, factory, saying, “Either let them open that factory or sell it to somebody and they’ll open it.” ” demanded the company. The company didn’t budge.
“I think the bully pulpit has a role,” said Todd Tucker, director of industrial policy and trade at the Roosevelt Institute, a left-leaning think tank. “But his policy decisions lack focus and are inconsistent.”
Mr. Trump’s efforts to attract foreign companies to the United States have also had mixed results.
At a groundbreaking ceremony for a Foxconn flat-screen TV manufacturing plant in Wisconsin in 2018, Trump called the Taiwanese company’s project “the eighth wonder of the world.” Plans for a $10 billion factory later fell through due to changing market dynamics. Much of the planned land remains undeveloped and most of the promised work has yet to materialize.
Mr. Trump this week renewed his pledge to make the United States a magnet for foreign investment, but gave mixed messages about what kind of investment would be accepted. Republicans and Democrats have become particularly wary of China-related investments in recent years that could threaten U.S. national security or pose risks to sensitive supply chains.
The former president on Monday called on Pennsylvania farmers to impose new restrictions on China’s purchases of U.S. farmland. In both speeches this week, he said Japan’s Nippon Steel Corporation’s planned takeover of US Steel should be blocked by the federal government.
“It certainly seems at odds with his plan to attract international companies,” said Nancy McClarnon, president of the Global Business Alliance, a lobby group representing international companies. “Our political leaders should unequivocally support and encourage cross-border investment from our major trading partners and strategic allies.”
Some of Mr. Trump’s ideas, such as tax cuts, require Congress to introduce legislation. Others may be enacted through executive authority. Trump also suggested that new manufacturing “ambassadors” would help lead hiring efforts.
“We’re going to bring thousands of companies and trillions of dollars of wealth back to the good old United States,” he said. “We’re going to do it quickly.”
