Tesla Motors CEO Elon Musk has joined President Trump’s new manufacturing council. The new manufacturing council, which will include business execs and labor leaders, will be led by Dow Chemical CEO Andrew Liveris. The council will be a collaboration where Trump can work with members on “how best to promote jobs and get Americans back to work again.” To do so, Trump has said he wants to reward companies that manufacture in the U.S. as well as to penalize companies that continue to manufacture abroad and ship back to the U.S. The penalties will involve imposed border taxes.
An example of this policy already in action occurred when United Technologies CEO Gregory Hayes learned that their subsidiary, Carrier, which produces heating and cooling equipment, had to reduce many of the jobs it had promised to Mexico or face Trump’s vengeance. Later, Trump preened and bragged that he had single-handedly saved Indiana 2,000 jobs. In this new world in which government and corporate America wash each others’ proverbial hands, UT will receive $7 million in incentives over several years.
How will Musk answer critics who would posture that such Trump administration manufacturing changes will do little more than to pass costs on to American consumers in the form of increased taxes on goods made abroad?
One topic proposed for the manufacturing council is likely to be Trump’s plan, which he announced on Monday, to cut regulations by 75 percent or “maybe more.” The President did not outline which rules he would target when he made the statement. Musk is reported to have also met with Trump on Monday, with Ford’s Mark Fields present. In the past, Musk has been quoted as saying that there is a fundamental problem with regulators. “If a regulator agrees to change a rule and something bad happens, they can easily lose their career. Whereas if they change a rule and something good happens, they don’t even get a reward. So, it’s very asymmetric … How would any rational person behave in such a scenario?” Musk will be able to see firsthand exactly how Trump will respond to the asymmetry in the manufacturing sector when the manufacturing council convenes.
Another area of work for the council will be directed toward Trump’s campaign pledge to slash the corporate tax rate. When Musk joined Trump’s Strategic and Policy Forum in December, the President and the gathered tech execs shared this common interest in taxes. Trump has also promised to slash corporate tax rates on funds that companies have stashed in offshore accounts. It is widely rumored that many Silicon Valley’s giants are among this illustrious group. Trump has argued that these companies will then repatriate those current offshore funds into U.S. jobs, further promoting his agenda to Make America Great Again.
Some of the influential U.S. manufacturers named to the new council in addition to Musk include AFL-CIO president Richard Trumka, Intel CEO Brian Krzanich, Dell CEO and founder Michael Dell, Ford CEO Mark Fields, Boeing’s Dennis Muilenburg, Corning’s Wendell Weeks, General Electric’s Jeff Immelt, and Lockheed Martin’s Marillyn Hewson.
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