President Donald Trump says he has a secret plan for economic development. He wants to throw money at American businesses and punish—somehow—companies that don’t do what he wants.
The president floated the idea of what he called an “economic development bill” during an exclusive interview with Forbes, published today. The bill, Trump told Forbes‘ Randall Lane, is a secret for now (or at least it was) and will reward companies for keeping jobs in America while those that move jobs overseas will be “penalized severely.”
“An economic-development bill, which I think will be fantastic. Which nobody knows about. Which you are hearing about for the first time,” Trump said, in language that can only be described as Classic Trumpian—teasing with just enough information to keep the viewer watching, while simultaneously trying to make himself sound like the smartest guy in the room.
Trump said the secret bill would be based on reciprocity.
“It’s both a carrot and a stick,” Trump said. “It is an incentive to stay. But it is perhaps even more so—if you leave, it’s going to be very tough for you to think that you’re going to be able to sell your product back into our country.”
There’s a very real possibility that this is all bluster. The White House apparently did not respond to requests from several media outlets that asked for more details about the president’s secret economic development plan. An unnamed White House official told CNBC the plan would be discussed after tax reform and infrastructure bills are passed through Congress.
In the Forbes interview, Trump seemed to be struggling to explain how the proposal would work. “What I want to do is reciprocal,” he said. “If somebody is charging us 50%, we should charge them 50%. Right now they charge us 50%, and we charge them nothing. That doesn’t work with me.”
One might be inclined to ask: 50 percent of what? Trump has been talking about slapping reciprocal tariffs on imported goods for a while—since at least the early stages of his presidential campaign—but it’s unclear that he’s proposing that here. Tariffs applied to goods from certain countries as reciprocal penalties for other governments putting tariffs on American goods would not punish companies for leaving. They would hurt American workers (by driving up prices) and American companies (for the same reason) and that, well, seems like an odd way to reward companies for keeping jobs here.
An economic development scheme would be similarly myopic. State governments have been throwing money at businesses for years with little to show for it, and the federal government already gives businesses piles of taxpayer money every year via loans issued by the Small Business Administration, grants through various green energy programs, backdoor subsidies such as the Import-Export Bank, and more. If the secret to economic development is government spending, we should all be tired of winning by now.
Lower taxes and less regulation—which Trump supports some of the time, though not when goods are crossing borders—will do more to boost American businesses’ bottom lines and workers’ paychecks than more special treatment for politically favored firms.
For all his posturing as an outsider, Trump is doubling down on years of failed government policies. Whether he’s going after specific companies for making decisions he disagrees with—like he did last year by first threatening, then striking a special deal with Indiana-based air conditioner manufacturer Carrier—or threatening to punish entire industries for the “crime” of providing American consumers and businesses with cheap products, Trump seems consistently eager to stick his government’s nose into business.
Or, as Forbes‘ Lane put it: “And so here we are, the first president to come solely from the private sector, representing the party that for more than a century championed laissez-faire capitalism and free trade, proposing that government punish and reward companies based on where they choose to locate factories and offices. Is the president comfortable with that idea?”
“Very comfortable,” Trump said.