President-Elect Donald Trump struck a deal with Carrier today, saving 1,000 jobs from going overseas. In return, the state of Indiana will grant Carrier a a $7 million dollar tax cut over the next 10 years. One of Donald Trump's biggest promises throughout his campaign was to encourage corporations to keep jobs in the US, instead of outsourcing to other countries, like Mexico and China. On paper, the deal seems positive, as 1,000 workers get to keep their jobs. However, this may set a precedent going forward.


For those who are unaware, Carrier is a brand under United Technologies Corporation, and they manufacture and distribute air conditioning services, as well as refrigeration and food service equipment.

Although Trump is saving 1,000 jobs from going overseas, "Carrier still plans to move roughly 1,300 other jobs to Mexico and close another facility in Indiana," according to Michelle Fox of MSNBC. So while Trump is saving 1,000 jobs, he is still losing 1,300.

What does this mean for the future?

In his press conference at Carrier following the announcement, Trump said, "Companies are not going to leave the United States anymore without consequences. Not going to happen. It's not going to happen, I'll tell you right now." Trump may create a precedent with this deal.

Because of this deal, other corporations will begin to keep "some" jobs in the US in exchange for tax cuts. Robert Shapiro, former secretary of commerce under Bill Clinton, explained it better than I ever could:

"We certainly don't want to take as our guide to creating jobs special tax breaks for a company that earned $7.5 billion in profits last year, got $6 billion in defense contracts, paid its top five executives $50 million, in order to preserve 1,000 out of 2,100 jobs."

In order to keep good on his promise to keep jobs in the US, Trump will now have to give tax cuts to any and all corporations considering outsourcing their workforce.

The premise of keeping jobs in the US makes sense, because by doing so, there will be more jobs for the American people. However, the tax cuts to Carrier are going to cost the citizens of Indiana a lot of money, which may backfire down the line. Is it worth an increase in taxes to everyday citizens to give tax cuts to billion dollar corporations while saving a minimal amount of jobs?

We will see.

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