Donald Trump warns U.S. companies of punishment for leaving country

The United Technologies deal, which provides the tax breaks over a decade, also covers another 300 Carrier jobs that were not slated to go to Mexico.

As Donald Trump announced a deal that would keep 1,000 factory jobs in IN, nearly five times as many people are being laid off in the state due to competition.

During the campaign, he had said that tariffs will be levied on companies that move bases to Mexico or Asia for their cheap labour.

The $7 million incentive package Carrier Corp. will receive in a deal with President-elect Donald Trump and Vice President-elect Mike Pence is a departure from how tax credits are commonly used in Indiana.

After president-elect Donald Trump announced that he will be moving more than 2,000 jobs from IN to Mexico, air conditioning company Carrier Corp. stated that they had made a deal with the Donald Trump to retain 1000 jobs IN the State of Indiana.

As Donald Trump was patting himself on the back for “saving” about 800 Carrier jobs from going to Mexico – while not being able to save 1100 others from heading south of the border – he may also have been patting himself on the back for making money on the deal.

Although hundreds may keep their jobs, others apparently will not, since about 1,400 workers were slated to be laid off – and many workers have not yet been told their fate.

But Tyler Cowen, professor of economics at George Mason University who identifies as a libertarian, worries that under a Trump administration, a kind of “crony capitalism” – where companies that are good to a presidency are rewarded – will prevail. “They are a subsidy to a company with little value to society”. Carrier from the state of IN was already offered the tax break before the election.

“It’s clearly a small deal”.

“The major factor that’s changed is we had an election”, he said, adding that Team Trump was well aware of UT’s lucrative federal contracts.

The deal seems to be in keeping a campaign promise by Trump, who often lambasted Carrier, and corporations like it, for moving out of the country. How does the government make a decision about when to intervene in such issues? Production from both United Technologies-owned plants was to be shifted to Mexico over the next few years. “I didn’t make it really for Carrier”, Trump said.

Jeffery Blackford is a 25-year employee of Carrier and wore a red Trump baseball cap to Trump’s announcement. “I’ve been talking about Carrier now for four months, right?” Democratic U.S. Sen. Joe Donnelly disputes that claim, saying Carrier executives couldn’t specify any such regulations and blames the action on the company seeking lower labor costs.

“In essence, United Technologies (parent of Carrier) took Trump hostage and won”. And that should send a shock wave of fear through all workers across the country. And working class taxpayers, as always, will pay for it even as more jobs leave the country in bad deals like this one. “They think it’s a play, a set-up or a scam”.

Analysts also question Mr Trump’s plan to cut business taxes and regulations, and slap high tariffs on goods made by United States companies in Mexico. “I’m not a big fan of this kind of negotiation”.