Trump Transition

Peter Navarro: At Carrier, Trump proves America First is an attitude, not a slogan

 

The new dawn of American manufacturing broke Thursday with one big step for the workers of Indiana and one far bigger step for a more muscular trade policy: Carrier will stay in Indianapolis – along with more than 1,000 jobs.

The Never Trumpers will be quick to give others credit or attack the terms of the deal. But there is something much more important going on here that is the real story. It is a story about how the loss of America’s manufacturing base has been a politician-made disaster rather than the inevitable march of globalization.

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In this story, American multinationals like United Technologies and its Carrier subsidiary along with other marquee off-shorers like Boeing, Apple, General Motors, GE, and Intel have been operating in a world in which they have been both pushed and pulled to foreign lands – and allowed to have their way with American workers because neither the White House or the collective power of Congress has stood in their way.

The “push” offshore has come from excessive regulations, the highest corporate tax rate in the world, and energy and electricity costs that are needlessly burdensome.  In this case, on the regulatory front alone,, the president and CEO of UTC Climate Controls and Security told Governor Pence that 53 of the 260 new federal regulations passed since 2013 have had a direct impact on their manufacturing business.

American multinationals like United Technologies and its Carrier subsidiary along with other marquee off-shorers like Boeing, Apple, General Motors, GE, and Intel, have been operating in a world in which they have been both pushed and pulled to foreign lands – and allowed to have their way with American workers because neither the White House or the collective power of Congress has stood in their way.

The “pull” offshore comes from the lure of sweat shop labor, lax environmental regulations, the availability of export subsidies and the advantages to foreign direct investment that come from manipulated, that is undervalued, currencies.

The Carrier deal teaches this push and pull can be overcome with strong leadership. Here, it is true that President-elect Trump and his incredibly gifted vice president used their bully pulpits – and all of the implied powers United Technologies saw that it would face -- to keep Carrier in the fold.  But there is much more that will unfold come Inauguration Day in a world where we need far more than a bully pulpit to revitalize America’s manufacturing base. 

Indeed, the broader goal of a Trump administration will be to change the rules of international trade in a way that once again makes it profitable for American corporations to build at home and for American workers to enjoy decent jobs at rising wages – even as the global economy soars to new heights.

The Trump trade agenda is coming because the Democrat’s Blue Wall across our manufacturing belt has crumbled, and the people have demanded change.  Taxes shall be cut, regulations shall be reduced, our oil, and gas, shale, and coal resources shall be unleashed, the “push” of forces offshore shall be eliminated and it will once again be profitable to produce on US soil.

At the same time, the Trump administration will eliminate the “pull” offshore by smartly negotiating new trade deals and renegotiating bad trade deals to ensure American workers and domestic manufacturers will compete on a level playing field.  And any trade cheaters and currency manipulators be aware – the White House will no longer turn a blind eye.

America First: This is an attitude, not a slogan.  Make America Great Again: This is a mission, not a political message. 

Carrier is but the first shot in a new era of trade peace through strength; and the world now knows that President Trump is coming to deal.  All he will insist on is a fair deal – whether he is negotiating with China or Europe or Japan or a World Trade Organization that has historically not had America’s best interests at the top of its agenda.

So be happy America.  Be very happy.  You have chosen your next president well.

Peter Navarro is a UC-Irvine business professor and author of stock market classics like “If It’s Raining in Brazil, Buy Starbucks.” He is a member of the Trump transition team.