Why Trump’s ‘outsourcing’ strategy is a disaster for the US and the world
Donald Trump’s outsourcing strategy has turned the United States into a global outsourcing powerhouse, with hundreds of thousands of US jobs at stake.
The Republican president’s policy to cut off foreign outsourcing to US companies has caused a global economic crisis, with millions of American workers losing their jobs.
“I’m going to do everything I can to make sure that companies that we have good relationships with, and good relationships to, can keep their head above water and keep growing,” Mr Trump said during his presidential announcement speech.
“But you can’t keep it going forever.”
The president, who took office in January, has pledged to reverse many of the policies he campaigned against during the 2016 election.
He has also proposed eliminating the US’ $350m tax incentive for companies to keep American workers in the country.
Under the tax incentive, firms that ship jobs overseas must offer up to 50 per cent of their profits back to the US.
It has created a $4.7bn loophole for US firms to continue hiring American workers at low wages, as they did before the tax policy.
The incentive has also caused an exodus of US companies from the global market.
The Trump administration has also cut off US aid to companies that use foreign labour and has threatened to impose trade tariffs on Chinese goods.
The president has threatened tariffs on US goods made in China and has also promised to cut $350 million in US aid for companies that buy American products.
The $350mn tax break has created another $4bn in revenue for the White House.
The US is already the world’s largest exporter of foreign-made goods and services, accounting for nearly a quarter of the world economy.
It is also the world leader in outsourcing.
“Our trade deficits with China and India are the largest in the world, and our trade deficits are greater than any other country in the advanced world,” Mr Pence said in his announcement speech on Friday.
“With a little help from our allies, our exports to the United Kingdom, Ireland, Germany, France and the Netherlands will increase by billions of dollars.”
Mr Trump also called for a reduction in trade tariffs between the US, Japan and the European Union.
“We will start a trade war, a trade deal with China,” Mr Donald Trump said.
“The best way to do that is to start by having a trade agreement with China.”
The administration’s trade policies have led to job losses in some sectors of the US economy.
The manufacturing sector lost 1.4 million jobs in December, with 1.2 million in the energy and telecommunications industries.
The coal, oil and gas industry has also shed jobs, with more than 3 million workers leaving.
“What the president’s done is he has put the entire United States at risk,” said Steve Davis, a senior fellow at the conservative Cato Institute.
“He’s been a terrible negotiator for the American people, but we’re not going to let him do it alone.”