Donald Trump has threatened U.S. companies — particularly those in the auto industry — with tax penalties and other punitive measures if they move manufacturing operations out of the country. The president’s pithy Twitter assaults have already led to a few PR victories with Carrier and Ford.
It’s doubtful, however, that Mr. Trump will have much long-term success on the job front simply by strong-arming chief executives. A more promising approach might be to aggressively pursue a strategy designed to improve the nation’s tax and business climate to make it more attractive for manufacturers to invest here.
On Tuesday, the president hinted as much.
At a breakfast meeting with the top representatives from the nation’s big three automakers, Mr. Trump took a more conciliatory tone. “We’re going to make the process much more simple for the oil companies and everybody else that wants to do business in the United States,” he said.
That could mean expediting the regulatory and permitting process as well as relaxing overly zealous environmental mandates.
For instance, “Car companies are spending billions to comply” with federal fuel economy standards set by the Obama administration and scheduled to become increasingly tougher over the next decade, the Wall Street Journal reports. The result is an auto industry forced to waste resources by making certain vehicles that meet the approval of federal regulators but don’t appeal to consumers.
The Journal reports that some analysts believe easing such requirements could “free up capital investment to support anywhere from 200,000 to 400,000 new U.S. jobs.”
The president should take a similar approach to Democratic calls for massive new infrastructure spending. The real danger here, of course, is that any such plan will become an orgy of pork and special-interest spending gussied up as job creation. Before reaching across the aisle to explore such an endeavor, Mr. Trump should secure support for cutting the red tape and litigation that typically slows such public-works projects and inflates the costs to taxpayers.
American’s business leaders can’t realistically expect Mr. Trump to give his thumbs a rest any time soon. It’s obviously not in his nature. But his Twitter barrages will be a whole lot easier for them to take if the new administration follows through on promises to streamline the federal administrative state and to pursue significant regulatory and tax reform.