The first week in the new Trump White House kicked off with a breakfast “listening session” including major American business executives. For the most part President Trump promised traditional Republican incentives of lower taxes and less regulation.
But the conversation also included threats to impose a “border tax” on companies that move business – especially jobs —to other countries, a plan that is not widely supported by Republicans in Congress. Trump said he’d like to hold similar meetings with business leaders on a regular basis, maybe every quarter.
“We’ll get to know each other very well,” he told executives, including CEOs from Ford, U.S. Steel, Dow Chemical and Under Armour.
The president renewed his campaign pledge to lower the top corporate tax rate from 35% to 15 or 20%. He indicated that for many businesses, less regulation would be an even greater asset.
“The problem with the regulation that we have right now is that you can’t do anything,” Trump said. “It’s out of control. It’s gotten out of control.”
The incoming administration already implemented a freeze on new government regulations. Ultimately, Trump has proposed eliminating about 75% of existing rules. He claims that companies can do that while still protecting workers and the environment.
“I’m a very big person when it comes to the environment,” Trump said. “But some of that stuff makes it impossible to get anything built.”
Trump regards both tax cuts and deregulation as crucial components to making business in the United States more attractive. “What we want to do is bring manufacturing back to our country,” he said. “It’s what the people wanted. It’s one of the reasons I’m sitting here instead of somebody else sitting here.”
The U.S. today has about 5 million fewer manufacturing jobs than it did in 2000. The erosion of high-paying factory jobs helped drive Trump’s popularity among rust belt voters in Pennsylvania, Ohio, and Michigan, and ultimately propelled him to the White House.
Many economists point out that the majority of jobs losses come from automation, which has let to factories producing more goods with fewer workers. Trump typically responds by highlighting labor-intensive factory work that’s moved to low-wage countries like China. American executives who move more of these jobs overseas will be punished, he said.
“A company that wants to fire all of its people in the United Sates and build some factory someplace else, and then thinks that that product is just going to flow across the border into the United States, that’s not going to happen,” Trump said. “They’re going to have a tax to pay a border tax.”
“Some people would say that’s not free trade,” he added. “But we don’t have free trade now,” pointing to barriers that other countries often erect to block U.S. imports.
Congressional Republicans have not been enthusiastic about Trump’s call for a border tax, which would complicate international supply chains and increase prices for U.S. consumers. But Trump told American business leaders, there’s a simple alternative.
“All you have to do is stay,” he said. “Don’t leave. Don’t fire your people in the United States.”