In order to bring American corporations home from China, this is what Trump has to do. The transition has to be gradual. The corporations can only phase out their off-shored production in China as they can recreate the necessary conditions for producing in the US. The process is, in effect, like bringing development to an undeveloped economy.
Trump, that is, the US government, will have to compensate the corporations for the enormous increase in their labor (and regulatory, liability, etc.) costs associated with again producing for US markets with US labor by changing the way the corporations' income is taxed. Companies that produce for their domestic market with domestic labor would have a low tax rate. Companies that produce abroad with foreign labor for their US market would have a high tax rate. The difference in the tax rates can be calculated to offset the labor cost differential. Companies that produce abroad for sale abroad would not be affected.
If Trump orders US corporations out of China before they can reconstruct the conditions for manufacturing and industry in the US, the firms will be without sales and revenues and fail.
The question is raised whether Trump can order US firms to leave China and return home. There are two reasons Trump's order might be simply rhetoric. One is that the corporations are content with their existing profits that flow from low cost labor and have no intention of losing the cost savings. US global corporations have the wealth to interfere in US elections and elections in every country in which they have a presence. If Trump goes against the global corporations, he will not receive their campaign funds. His opponent will instead.
Trump can make the argument that the offshoring deal only worked for the corporations, not for the American people. "Free market" economists gave assurances that better jobs would take the place of the manufacturing jobs moved offshore and that offshore production would pay back to the US consumer in lower prices more than the loss of wages from the off-shored jobs. This was not the case. Have any of you experienced lower prices of Nike shoes, Levi jeans, Apple computers and iPhones? The corporations did not deliver on the free market promise. They lowered their costs but kept the prices up. Not a single one of the better jobs materialized. Trump will need these arguments to put the corporations on the defensive.
The second reason is that Trump is alleged not to have the power to order US corporations to leave China and to return to their American work force, whatever is left of it. At one time this was probably the case. In 1952 President Truman nationalized the American steel industry in order to prevent a strike that would have stopped steel production during the Korean War. The Supreme Court ruled against Truman. But today after the extraordinary accumulation of powers in the presidency from the Clinton, George W. Bush, and Obama regimes, and the powers given by Congress to the executive branch to fight "the war on terror," the president today can rule by executive order.
Trump has cited the 1977 International Emergency Economic Powers Act as law empowering him to order US firms home from China. He has many additional powers. A president who has the power to detain in violation of habeas corpus US citizens indefinitely without evidence presented to a court, and who can order the execution of US citizens on suspicion alone without due process of law, can order whatever he wants.
Based on the powers created by Republicans during the George W. Bush Regime and Democrats during the Obama Regime, President Trump has the power to arrest CEOs and boards of directors that have off-shored production on the grounds that they are conspiring with China to steal American jobs and to drive the United States down into the ranks of Third World Countries. A far better case could be made for this than for the absurd Russia-gate story that was used to stop Trump from normalizing relations with Russia.
To insure that he has the deep state's support, all Trump has to do is to remind the US military/security complex that the United States cannot continue to produce the weapon systems necessary to remain as the world's hegemon unless it can reestablish its manufacturing and industrial capability. Andrei Martyanov in his new book, The Real Revolution in Military Affairs proves that in decisive weapons systems and force integration, the US is completely outclassed by the Russians, and in some respects by the Chinese. Indeed, it is not clear that the US is capable of defeating Iran in conventional war. The parts of many US weapons systems are produced abroad, which raises the question of supply during times of war.
With the backing of the deep state, Trump can order the corporations home.
For years, John Whitehead and I have stressed that Washington is creating a dictatorship. If the deep state is on Trump's side, he becomes a dictator who can dispense with elections and dispense with his opposition. To be clear, not only can Trump do this, but any future president can. The only question is who will be the target? White people? Offshoring corporations who have ruined America for their own profits? Russia? China? Iran?
No, I haven't gone off the deep end. I am describing for you the extrapolation of the implications of what we are witnessing and living. An American President elected by Americans dispossessed of their jobs and their livelihoods by greed-driven US corporations and faced with unlimited illegal immigration to drive down the wages of the lowly paid jobs that still exist, an American President who, like Ronald Reagan, declared peaceful intentions toward Russia in order to reduce the likelihood of a nuclear war that would destroy all life on Earth -- it is this President who is under attack.
Why is the President who wants to restore American jobs and reduce the threat of nuclear war so vehemently opposed by the American presstitute media, the liberal/progressive/left, the Democratic Party, and millions of otherwise doomed Americans? The only reason such an absurd attack on Trump could take place is that the military/security complex was behind it. Otherwise, a president with all the powers that have been accumulated in the presidency over the past quarter century could have arrested his opponents and held them in indefinite detention. Even President Lincoln could do this to 300 Northern newspaper editors during the War of Northern Aggression. Lincoln even exiled a US Congressman who was critical of Lincoln's invasion of the Confederacy.
Trump is correct that if the US is to remain a world power, it is necessary to restore manufacturing and industrial capability. If the US is to absorb the massive number of third world peoples it has admitted, it is necessary to restore middle class jobs and the ladders of upward mobility.
The way Trump should proceed is to explain to the corporations that they have inflated their profits in the near term at the cost of destroying consumer purchasing power, and thereby their sales, in the longer term. Americans whose real incomes are not rising do not have the discretionary purchasing power with which to purchase the goods and services that provide revenues to US corporations. Of course, the CEOs and directors are not here in the longer run, and they might not care. But a president can make it a patriotic issue and put them on the spot.
Next Trump needs to work with the corporations to alter the way they are taxed and to recreate the conditions necessary to restore manufacturing in the US. This is not a simple task. It requires cooperation, not conflict.
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