President Donald Trump’s path to becoming “the best jobs president that God ever created” was supposed to run straight through Indianapolis and the Carrier manufacturing plant that had for decades employed thousands of workers there.
Instead, more than a year after the then-president-elect stood before a crowd of cheering workers and trumpeted a deal to save their jobs — and months after the company’s name faded from the headlines and the president himself moved on to other talking points — more than 1,500 once-employed residents are now out of work, Indiana union officials say. More than 200 Carrier employees clocked out of their final shift at the plant just last week.
Trump’s campaign promises to punish companies that move factories overseas, bring back manufacturing jobs and revive the once-thriving Rust Belt sector became a constant refrain that helped him win the Midwest and ultimately the White House in the 2016 election. But they were also pledges he’ll find difficult to keep.
In the year since he took office, the president who once pledged to slap tariffs on trading partners and crack down on China has so far softened or abandoned — at least for now — many of his hard-line stances on trade. Trump has moved instead to cut the corporate tax rate and launch a deregulatory push, heralding a wave of announcements from other companies planning to invest and create new U.S. jobs. The president plans to tout those achievements during a visit Thursday to Pennsylvania.
But those plans offer no comfort for the Steel Valley workers at companies like Carrier that had counted on him to keep their jobs in Indiana.
“The workers that I talk to feel betrayed, because he made promises that he didn’t keep,” said Robert James, president of United Steelworkers Local 1999, which represents workers at firms including Carrier, its parent company United Technologies, Rexnord Corp. and Vertellus — all of which have laid off workers since late 2016.
At Carrier, workers found themselves at the center of the spotlight when Trump brokered a one-off deal between the firm and the state of Indiana that his team used as an example of what he would do as president. “They’re not gonna leave this country, and the workers are gonna keep their jobs,” Trump, then president-elect, said that day in December 2016.
Despite the show at the Carrier plant, the company has eliminated more than 500 jobs since July. And union officials fear that the $7 million Carrier received in state incentives as part of the Trump deal to keep jobs is only going to be invested in automation — ultimately leading to a need for even fewer employees.
The administration has taken some steps during its first year to follow through on what it promised: Trump has, for example, started renegotiating trade deals with Canada, Mexico and South Korea. And he’s exploring ways of using trade law to limit imports of goods and materials like steel and aluminum.
In principle, the policies are aimed at curbing the offshoring of factory jobs by importing less and creating more goods in the U.S. But such policies can hurt the broader domestic economy while doing little to help formerly robust factory towns in Indiana and elsewhere, leading trade experts and economists say, due to factors like the advanced state of the U.S. economy, the intricacy of global supply chains and Americans’ interest in buying services rather than goods.
“Their solutions are utterly counterproductive,” said Bob Lawrence, a Harvard professor of international trade and investment and senior fellow at the Peterson Institute for International Economics. “When you say you’re going to bring jobs back and you’re going to put tariffs on to do that, you’re actually going to really damage the competitiveness of a lot of these companies who source in different locations.”
Much to Carrier workers’ and others’ dismay, Trump has also shifted away from his specific focus on cutting down offshoring and zeroed in instead on domestic policies like tax and regulatory overhauls. The new tax bill, and, particularly, its lower repatriation rate, have already contributed in part to major companies such as Apple announcing new investment in the United States. But it has also sparked concerns that firms will use their new windfall to bolster executive compensation or the size of their dividends, for example, rather than reinvest it.
The president’s trip Thursday to a factory just outside Pittsburgh will bring less of the old message he delivered to factory workers at Carrier and elsewhere about keeping jobs from moving overseas. He’ll focus instead on wider benefits of the tax overhaul, including announcements of wage increases and one-time bonuses tied to the corporate tax windfall.
“The President has made tremendous progress in reversing the years of policies that sent these jobs away,” White House deputy press secretary Lindsay Walters said in a statement, emphasizing the administration’s steps to halt “the ballooning growth of regulations,” change the corporate tax code and give American workers a tax cut.
For Trump, the promises to revive the floundering manufacturing sector began early in his campaign and stretched beyond Carrier. In late November 2016, just days after his election, Trump tweeted that the chairman of Ford Motor Co. had called him to say the automaker would be keeping a plant in Kentucky rather than moving it to Mexico — though it turned out Ford was never planning to move that facility.
A month later, Trump took credit for Japanese company SoftBank’s decision to invest $50 billion in the U.S., creating 50,000 new jobs, posting on Twitter that the company’s CEO “said he would never do this had we (Trump) not won the election!” But the firm had pledged to invest billions in the U.S. economy nearly a month before Trump’s victory.
“It’s not an economic policy — it’s a kind of individual coercion,” said Claude Barfield, a resident scholar at the right-leaning American Enterprise Institute. “This is the kind of thing that you expect from some South American autocrat.”
Barfield and others cautioned that such tactics have a counterproductive effect: While threatening companies that take steps to move offshore may save a few thousand jobs overall, it also forces them either to buck the president and fall victim to his Twitter cannon or make decisions that reduce their own viability.
“The degree to which you deflect them from that … is the degree to which you’re making them less efficient and less able to produce the products, either here or abroad, that come back and help the U.S. economy,” Barfield said.
Trump has also discussed the need to levy tariffs on goods coming into the country, and his team of advisers has explored taking advantage of little-used sections of U.S. trade law to do so.
Commerce Secretary Wilbur Ross recently completed an investigation examining whether to restrict imports of steel for national security reasons, and another regarding aluminum is on its way to the president’s desk by early next week. Once he receives them, Trump has 90 days to decide whether to limit the imports, likely through tariffs, quotas or a combination of both.
The move is meant to bring relief to U.S. workers whose industry is suffering amid issues surrounding global overcapacity in steel and aluminum, caused in large part by China. But even there, the president has delayed action for months. His threats alone have had little effect in bringing relief — and, some lawmakers and industry representatives complain, they have had an adverse effect by sparking a flood of imports ahead of expected tariffs, damaging U.S. firms and hurting workers.
The issue with working to cut down on imports, economists say, is that more than half of all imported goods are known as intermediate products, meaning they are used as parts for larger or more valuable items that are then sent back overseas.
There’s also the simple fact that the economy is shifting from a manufacturing-based economy to be higher-skilled, higher-wage and focused more on services — which Americans have become more interested in buying over goods. At the same time, automation has increasingly displaced lower-skilled factory jobs, so the country is now producing more goods with a fraction of the people.
Companies also are continuing to move jobs offshore and are likely to continue to do so at an ever more rapid pace: Roughly one in four jobs are at risk of being moved offshore in the coming years, a new report from Indiana’s Ball State University shows.
And while pockets of the U.S. continue to struggle, having never quite recovered from the recession that ended in 2009, large swaths of it are now booming. Trump himself has alternated between making his near-constant promises to bring jobs back and trumpeting national statistics that show sustained job growth, low unemployment and a booming stock market.
“Things are going really well for our economy, a subject the Fake News spends as little time as possible discussing!” Trump tweeted last month, listing accomplishments that included companies returning to the U.S. and a stock market at “another RECORD HIGH.”
Regardless of the national data, and in spite of the potential for negative economic consequences downstream, bashing trade deals and vowing to revive the manufacturing sector is expected to remain a prominent part of political campaigns simply because it plays well in politically rich Rust Belt states.
And there’s no clear-cut way to bring the same jobs back to those areas, economists say. Some of them might never return. Jobs that are being created today are different from those of the past, and while new policies may help ignite some growth in the manufacturing sector, new opportunities will almost certainly require different skills and be located in different parts of the country.
“We have this strange thing in our politics where people get elected promising to bring back 1950s jobs, when we can’t fill 2015 or 2017 jobs,” said Scott Miller, a trade policy expert at the Center for Strategic and International Studies. “That’s the core conflict that is unresolved in all this.”
