Trump's Bold Promise: "We Will Take Their Jobs and Factories"—But at What Economic Cost?

Former US President Donald Trump vowed to lure foreign companies to shift their operations to the US using tax incentives and the threat of steep tariffs, in a major economic address aimed at easing voter concerns over jobs and wages.

“Under my leadership, we are going to take other countries’ jobs,” Trump declared on Tuesday in Savannah, Georgia. “We are going to take their factories.”

This speech is part of a week-long series of events where both Trump and his Democratic rival Kamala Harris are amplifying their competing economic messages across swing states. With fewer than 50 days before the election, each candidate is pushing to prove they are the best fit to handle the US economy, a top issue for many voters.

“We are going to bring thousands of businesses and trillions of dollars in wealth back to the good old USA,” Trump stated, calling for foreign automakers like Volkswagen, Toyota, and Hyundai to build their plants on US soil.

However, Trump's plan relies on Congress approving his proposed corporate tax cuts, lowering the current rate from 21% to 15%, and convincing foreign companies to break from their established supply chains. While many automakers already operate plants in the US, their headquarters remain overseas.

Trump criticized major US companies like GE Appliances and IBM for offshoring jobs and vowed to personally recruit foreign firms to set up manufacturing hubs in the US. He dangled incentives such as low regulations and the creation of “special zones of federal land” for factories to attract these businesses.

Tariffs as the Core of Trump's Economic Strategy

Trump’s economic platform revolves heavily around tariffs, positioning them as a tool to punish countries like China while protecting US jobs. He has proposed tariffs as high as 200% on goods like electric vehicles and tractors made outside the US. His tariff plan includes a 10% to 20% levy on all imports, with even more severe taxes on Chinese products.

Kamala Harris has sharply criticized Trump’s plan, labeling it a “Trump sales tax” that would increase costs for US consumers. According to the Urban-Brookings Tax Policy Center, middle-income households could pay an additional $1,350 annually under Trump’s tariff proposals. Meanwhile, Trump defended his approach, asserting that "billions of people around the globe will soon be buying products proudly stamped ‘Made in the US’.”

Mixed Results from Trump's First Term

During Trump’s first term, he used a similar mix of tariffs and tax incentives to attract foreign investment, with limited success. The highest-profile project, a $4.5 billion factory promised by Apple supplier Foxconn in Wisconsin, failed to meet expectations, falling far short of its target to employ 13,000 people.

Foreign investment under Trump totaled $358 billion during his four years in office, according to the United Nations—a 22% increase compared to the prior four years. However, this figure was outpaced by President Joe Biden, whose first three years saw $426 billion in new US-based investments, thanks to government subsidies promoting semiconductor and green energy plants.

Global Economic Risks and Retaliation

Trump’s strategy to transform the US into a stronger exporter, highlighted by his speech in Savannah, raises concerns among economists about the potential for increased global protectionism. The combination of lower corporate taxes and high tariffs could lead to a surge in inflation and disrupt global trade as countries retaliate.

“Trump’s policies are likely to set off a new era of protectionism that will roll back trade integration and undo benefits that consumers and firms have enjoyed,” said Eswar Prasad, a former IMF official and now a professor at Cornell University.

Economists warn that if Trump wins, the rush to impose new tariffs could lead to a flood of imports as companies try to get their products into the US before changes take effect. This could have long-term impacts on global trade in the months and years following the election.

“If Trump is elected as the US president, global trade in goods is likely to face stricter policies and intensified structural competitiveness, which will affect worldwide trade,” said Inga Fechner, a global trade economist at ING.