United States Democratic presidential nominee Joe Biden on Wednesday accused President Donald Trump of breaking his pledge to revive manufacturing in the US, as he pitched voters on an alternative plan that would punish companies that ship jobs overseas and reward those that create them at home.
Speaking to an audience outside a United Auto Workers hall in Warren, Michigan – a key battleground state and the cradle of the US auto industry- Biden unveiled proposals that would slap a 10 percent tax on firms that offshore operations and encourage companies to bolster the country’s factory sector with a ‘Made in America’ tax credit.
“If you reshore jobs that had previously been sent overseas, expand your operations in the United States, or increase wages for manufacturing jobs we’ll make an even smarter strategic decision for your company because we’ll make sure you get a tax credit,” said Biden.
In addition to tax penalties and credits – which would need a green light from Congress – Biden also promised to sign a series of executive orders during his first week in office to enforce current buy-American rules for federal contracts and close “loopholes” in Trump’s signature 2017 Tax Cuts and Jobs Act that critics say incentivise corporate offshoring.
“The Biden-Harris administration is going to deliver on the promise to buy American,” said Biden.
Wednesday’s proposals are part of Biden’s Build Back Better economic revival blueprint that includes investing $700bn in federal funds to promote US manufacturing and innovation, spending $2 trillion on green energy infrastructure during his first term in office, and spending $775bn over ten years to improve childcare and eldercare.
Key to each component of the plan is the promise to create millions of new, well-paying jobs at a time when the US labour market is under extreme stress from the coronavirus pandemic.
Michigan, where Biden addressed a small audience of union members on Wednesday, is part of the US Rust Belt, where manufacturing has been gutted over the decades by a combination of automation and companies outsourcing jobs to countries with lower labour costs and fewer regulations to protect workers and the environment.
Trump’s promise to help disenfranchised blue-collar workers by putting “America first” with his economic and trade policies helped him win the key Rust Belt states of Michigan, Ohio, Pennsylvania and Wisconsin in 2016.
On Wednesday, Biden made a hard play for those voters by taking Trump to task over his manufacturing record.
“Even before President Trump’s failed response to COVID-19 crashed our economy, his reckless and chaotic trade policy had thrown American manufacturing into recession,” said Biden.
Trump has made his stewardship of the economy a cornerstone of his re-election strategy, emphasising the strength of the US jobs market – including record low unemployment rates for Blacks and Latinos- before the coronavirus pandemic pushed the economy into its sharpest quarterly contraction on record.
Trump and his supporters credit the 2017 Tax Cuts and Jobs Act, as well as the Trump administration’s renegotiation of trade deals, and rollbacks of regulations for promoting economic growth that were established during the era of President Barack Obama.
But COVID-19 has delivered an unprecedented blow to the US and global economies, and even optimistic forecasts don’t see a full recovery for the US until sometime next year.
So far, roughly half of the jobs lost after lockdowns swept the nation in March and April have been regained. The US unemployment rate dropped to 8.4 percent in August – well off the pandemic peak of 14.7 percent in April, but still more than double the pre-lockdown jobless rate of 3.5 percent.