On Thursday, President-elect Donald Trump and Vice President-elect Mike Pence plan to hold a news conference touting the deal they struck this week with United Technology to keep fewer than 1,000 Carrier jobs in Indiana.
In exchange for not outsourcing some jobs, United Technology, which made a profit of $7.6 billion last year and owns Carrier, will reportedly receive $7 million over 10 years in state economic incentives. The company was also assured the Trump administration will lower corporations’ federal tax burden and ease regulations.
In a Wednesday press release, Carrier acknowledged both the federal and state incentives.
“Today’s announcement is possible because the incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive U.S. business climate,” it says. “The incentives offered by the state were an important consideration.”
Trump and Pence dangled carrots in front of United Technology to entice the corporation to not outsource roughly 850 jobs to Mexico. But that’s a major departure from the approach Trump promised while talking about Carrier on the campaign trail.
During a rally in Indianapolis in April, Trump detailed plans to hit companies like Carrier that outsource jobs with a tariff of 35 percent when they try to sell their products in the United States.
Addressing Carrier specifically, Trump said, “you’re going to pay a damn tax when you leave this country and you think you’re going to sell product [here] because we’re all so stupid.”
During a Meet the Press interview three months later, Chuck Todd brought up Carrier specifically and asked Trump to “explain the consequence” for companies that outsource.
“If they’re going to fire all their people, move their plant to Mexico, build air conditioners, and think they’re going to sell those air conditioners to the United States — there’s going to be a tax,” Trump said. Pressed on exactly what that tax would be, Trump replied, “It could be 25 percent, it could be 35 percent, it could be 15 percent — I haven’t determined.”
Trump went on to denounce government officials for naively thinking that providing economic incentives to corporations keeps jobs in the United States — the exact approach he’s now taking with Carrier.
“We have been working on trying to stop — this government, because we don’t know what we’re doing, and not only Obama, they’ve been trying to stop this from before Obama — but they don’t know,” Trump said. “They’ve tried low interest loans, they’ve tried zero interest loans — these companies, they don’t need money.”
Since Carrier still plans to outsource a good number of jobs to Mexico — Fortune reports 600 from an Indianapolis plant and another 700 from a Huntington, Indiana plant are still slated to move south of the border, despite this week’s deal — it remains to be seen whether Trump will follow through with his campaign promise to hit the company with a stiff tariff.
The contradiction between what Trump said on the campaign trail and the deal he and Pence struck with Carrier was highlighted by Sen. Bernie Sanders (I-VT) in an op-ed published by the Washington Post on Thursday entitled, “Carrier just showed corporations how to beat Donald Trump.”
“Just a short few months ago, Trump was pledging to force United Technologies to ‘pay a damn tax.’ He was insisting on very steep tariffs for companies like Carrier that left the United States and wanted to sell their foreign-made products back in the United States,” Sanders wrote. “Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How’s that for standing up to corporate greed? How’s that for punishing corporations that shut down in the United States and move abroad?”
The Carrier deal isn’t the only example of President-elect Trump abruptly breaking with the tough rhetoric of candidate Trump. Just weeks after his last campaign ad featured singled out Goldman Sachs CEO Lloyd Blankfein as representing the “global power structure” responsible for pillaging America’s working class, Trump picked numerous Goldman alums for high-ranking positions in his administration. His Treasury Secretary choice, Steven Mnuchin, spent 17 years at Goldman before buying mortgage lender IndyMac in 2009, where he ran a “foreclosure machine,” in the words of the California Reinvestment Coalition.