In his campaign for president, Donald Trump pledged retribution to Carrier, the air conditioning and heating giant that was planning to move 2,000 jobs from Indiana to Mexico.
In the end, he and Vice President-elect Mike Pence – the governor of Indiana – used a traditional combination of carrots and sticks to save about half those jobs: They bought them with the kind of incentives Trump had criticized during the campaign. Also, and surely not insignificantly, Carrier’s parent company, United Technologies, must have understood the latent threat to its $5 billion to $6 billion in federal contracts, much of it through the Defense Department.
In the end, the deal that Trump celebrated Thursday springs from the same sort of government help that has lured and retained jobs around the country for years, including in Western New York, where state investment produced the soon-to-open SolarCity plant in South Buffalo. It’s good for the workers at that plant and for the tax base of Indianapolis. Only a curmudgeon would begrudge the benefit.
It’s a package that may be hard to replicate, though. Too many workers at too many companies are at risk of job losses and few have them offer the kinds of pressure points that United Technologies does. So while this was a great win for some of the workers at Carrier and for Trump personally, it may turn out to be the anomaly.
The dangerous exception would be if Trump were to enact the kinds of tariffs he has been threatening, and which he is empowered to do under vaguely defined conditions that do not require the assent of Congress. That could make a difference, while at the same time inviting a host of collateral consequences that should make him think twice.
According to Politifact, which interviewed a number of experts, those consequences would likely include rising consumer costs at a time of stagnant wages, increased production costs, a declining stock market, higher interest rates and, overarching it all, a trade war.
The problem with all of this is that such an approach would fight economic forces that are largely unstoppable and that, frankly, shouldn’t be stopped. The world has grown increasingly interconnected since the end of World War II and, partly as a consequence, there has been no World War III. Tariffs and trade wars will strain that trend, possibly fatally.
This is a period of stress in the American and world economies. That interconnectedness comes with a cost, as does automation, which has more to do with job losses than trade deals do. The job of the president – and governments around the world – is to manage those stresses and ease the transition to a new economy. It isn’t to make things worse through trade wars that will produce more losers than winners.
Trump did well by the workers at Carrier, but his approach needs to be broader based to serve the long-term needs of a sprawling, international economy.