Throughout his campaign, President Elect Donald Trump has made it a point that one of his main priorities as President will be to bring back manufacturing jobs to America. In an effort to prove his dedication to that priority, he has begun boldly publicly rebuking some of America’s largest corporations such as General Motors, Lockheed Martin, and United Technologies for outsourcing jobs to other countries, or increasing prices on consumers. Per Reuters, according to some prominent Wall Street bankers, crisis managers and some influential corporate executives this threat has forced some companies to reconsider potential job cuts, and rethink some of their overseas operations out of fear of receiving the label.
In December, Trump sent out a tweet essentially warning companies that attempting to commit ‘un-American’ acts such as the ones previously mentioned, will face serious retribution and consequences. His “America First” slogan indicates an anti-globalization strategy for America hoping to return manufacturing jobs to economically depressed areas in the country. This would likely result in higher manufacturing costs (otherwise the companies would likely already be operating here), which though it would provide more manufacturing jobs, might also result in increased prices for consumers as companies pass along the extra cost, or decreased profits of those businesses, or some combination of both possibilities.
His nationalist tone, in conjunction with his large social media presence to convey his message instantly whenever he sees fit gives him a unique platform that has spooked corporations considering mergers and acquisitions that would involve significant job cuts production/tax domicile overseas – deals that could be seen as unpatriotic. Per Reuters, Bermuda based White Mountains Insurance Group was considering selling itself in a transaction that would have resulted in an inversion, allowing a US based buyer to move its tax domicile overseas. After the November elections, the deal ultimately fell apart as the potential US buyers feared the ‘anti-American’ label from Trump, and the strong possibility that Trump would be lowering the corporate tax rate.
According to the Fitbit CEO, his firm is already preparing contingency plans in case it comes under fire from the Trump administration. Their manufacturing plant – based in China – may be at risk of facing higher import tariffs. This fear stems from the tone from Trump, and his appointment of Peter Navarro (a vocal critic of China) to lead a new White House Office overseeing trade policy with China. Because of this, they are considering moving manufacturing jobs out of China, back into America. The Trump effect has caused companies to beef up their Twitter monitoring and have PR firms on standby, in case Trump calls them out as he has already proven to have a significant effect on stock prices and public perception when he does so.