Trump bullying companies to stay in the US

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Is this going to work?

But, as with a few other corporate announcements that Trump has touted as endorsements of his plans to rewrite the rules of global trade, there was less than met the eye in the Ford announcement. Yes, Ford CEO Mark Fields flattered Trump in his statement, but it’s clear that Ford made the decision to cancel the new Mexican factory for one reason only: It no longer made economic sense.

Also read: CEOs pandering to Trump risks dangerous ‘caudillo capitalism’

The Ford announcement reveals the hidden danger of Trump’s bullying tactics: Corporations may be eager to give Trump some credit for decisions they’d make anyway, which will bolster Trump’s confidence that there’s nothing wrong with American manufacturing that can’t be solved by getting tough. Tear up the treaties, impose some tariffs, bully some CEOs, and — voila! — America is back!

The reality is more complex, of course. American companies (and European, and Japanese and Chinese companies as well) aren’t putting some of their production in Mexico just to take advantage of a poorly negotiated NAFTA. They are investing in Mexico because it’s a great place to do business. And Trump can’t change that reality with a tweet or a tariff.

Donald Trump can bully auto makers all he wants, but he can’t repeal the laws of economics - MarketWatch

President-elect Donald Trump sent out a tweet Tuesday morning threatening to tax General Motors for manufacturing abroad. "General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border," Trump tweeted. "Make in U.S.A. or pay big border tax!"

Trump says GM should manufacture in the US - Business Insider

Ford CEO Mark Fields on Tuesday announced that the carmaker would cancel plans to invest $1.6 billion to build a new factory in Mexico. Instead, the company will undertake a $4.5 billion investment to roll out 13 electric vehicles over the next five years, Fields said.

Ford drops $1.6 billion Mexico plant, plans US electric-car expansion - Business Insider

But these EVs could very well be the victim of Trump abolishing or lowering fuel standards (something for which Ford is actively lobbying..)

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Even foreign firms are not safe:

Toyota shares plummeted within minutes of a negative tweet from the president-elect, causing the company to lose around $1.2 billion in value. The car company tanked on the stock market within five minutes of Donald Trump vowing to stop the firm from moving to Baja California in Mexico, where it already has a plant. Mr Trump was confused about the location of the new plant. Toyota had first announced plans for a new plant in Mexico in April 2015 - but in Guanajuato city.

Toyota loses $1.2bn in value five minutes after Donald Trump’s tweet | The Independent

Donald Trump has tweeted that Toyota will face hefty tariffs on cars built in Mexico for the US market. The President-elect said the Japanese company would be hit with a "big border tax" if it went ahead with plans to build Corollas south of the border. American car companies have faced harsh criticism from Mr Trump for building cars more cheaply outside the US.

Trump says Toyota will face tariffs on cars made in Mexico - BBC News

When President-elect Donald Trump tweets about a public company, the market listens.  And if you hold the stock of one of the companies that has come into Trump's crosshairs, finance app Trigger thinks you'll want to know about it. The free iPhone app works by letting you set up financial "triggers," which you can then use to guide your investment decisions. For example, you can set a reminder to sell a stock when its price reaches a certain level, moves a specific percentage, hits a one-year low or high, and so on. When the condition occurs, Trigger sends you a notification, and you can decide whether to act on it.

Triggers helps you trade stocks on Trump's tweets - Business Insider

Ford changing track because of Trump? Perhaps not:

He later explained to Business Insider the thinking behind the decision to switch gears on the new plant in Mexico, a $1.6-billion project. "In the case of the plant, we go through an ongoing process every year, looking at segment changes, and then we do our volume and capacity planning," he said. "By late fall, it was very clear we didn't need the capacity, and we made the decision."

Ford CEO: Why we're killing plan to build Mexico plant - Business Insider
[url=http://www.businessinsider.com/ford-ceo-why-were-killing-plan-to-build-mexico-plant-2017-1][/url]

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Does all that bullying help, or is it mostly for show. Here is Krugman:

The Age of Fake Policy, by Paul Krugman, NY Times: On Thursday, at a rough estimate, 75,000 Americans were laid off or fired by their employers. Some of those workers will find good new jobs, but many will end up earning less, and some will remain unemployed for months or years.

If that sounds terrible to you..., I’m just assuming that Thursday was a normal day in the job market. ... In an average month, there are 1.5 million “involuntary” job separations (as opposed to voluntary quits), or 75,000 per working day. Hence my number. ... 

Real policy ... involves large sums of money and affects broad swathes of the economy. Repealing the Affordable Care Act ... would certainly qualify.

Consider, by contrast, the story that dominated several news cycles a few weeks ago: Donald Trump’s intervention to stop Carrier from moving jobs to Mexico. Some reports say that 800 U.S. jobs were saved; others suggest that the company will simply replace workers with machines. But even accepting the most positive spin, for every worker whose job was saved in that deal, around a hundred others lost their jobs the same day. ...

This was fake policy — a show intended to impress the rubes, not to achieve real results. The same goes for the hyping of Ford’s decision to add 700 jobs in Michigan...

The incoming administration’s incentive to engage in fake policy is obvious... Mr. Trump won overwhelming support from white working-class voters, who believed that he was on their side. Yet his real policy agenda, aside from the looming trade war, is standard-issue modern Republicanism: huge tax cuts for billionaires and savage cuts to public programs, including those essential to many Trump voters. ...

Still, none of this would work without the complicity of the news media. ...

Sorry, folks, but headlines that repeat Trump claims about jobs saved, without conveying the essential fakeness of those claims, are a betrayal of journalism. This is true even if ... the articles eventually, quite a few paragraphs in, get around to debunking the hype: many if not most readers will take the headline as validation of the claim.

And it’s even worse if headlines inspired by fake policy crowd out coverage of real policy. It is, I suppose, possible that fake policy will eventually produce a media backlash — that news organizations will begin treating stunts like the Carrier episode with the ridicule they deserve. But nothing we’ve seen so far inspires optimism.

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Do as I say, not as I do..

Donald Trump has been shaming and bullying American companies that locate their facilities in other countries. But Trump’s own companies do exactly the same thing. From an economic point of view, there’s no difference between United Technologies’ UTX, -0.60%  Carrier heating-and-cooling division locating a manufacturing plant in Mexico and the Trump Organization’s development of a golf course in Scotland. Trump (still) owns more than a hundred companies that do business in dozens of countries. He’s no different than any other multinational company that scours the global market for opportunities to make money, without regard to national pride or borders on a map.

Why Trump’s golf courses in Scotland are just like Carrier’s plant in Mexico - MarketWatch