If Deere & Co. wants lower taxes, they should get with the new Trump program and that's the subject of the riff. While Kamala Harris unveils her third economic plan in just two months of campaigning, and it's essentially a cut-and-paste job from "Bidenomics" over the past three and a half years, Donald Trump, in North Carolina, built upon his bold, big-bang "America First" manufacturing plan called the "New American Industrialism." Here’s a quick clip from Mr. Trump today in North Carolina:
TRUMP: "Here is the deal that I will be offering to every major company and manufacturer within our country. I will give you the lowest taxes, the lowest energy costs— I will cut your energy in half — the lowest regulatory burden, and free access to the best and biggest market."
The centerpiece in this plan is slashing the business tax rate from 21% to 15%, so long as the products are made in the USA. Mr. Trump also promises 100% expensing write-off for machinery and equipment, along with a major ten-to-one deregulation plan, and "drill, baby, drill" to slash energy costs. By the way, here is a very important add-on today regarding the dollar:
TRUMP PROMISES TO HALT TAXES ON SOCIAL SECURITY: CITES ‘INFLATION NIGHTMARE’ FOR SENIORS
TRUMP: "If I'm elected president, we will have the world's reserve currency in better shape and order, and every country will follow it and if they don't, we will put tariffs on that country, and we won't trade with that country."
For those on Wall Street who believe Trump wants cheap money and a sinking dollar, think again. A sound and steady dollar was in the Trump RNC platform and repeated at the New York Economics club. This is a major economic growth blueprint. Now, here's what won't work for Mr. Trump, and I completely agree. Deere & Co. is thinking about moving much of their manufacturing business to Mexico. This is not what Trump wants, it's not "America First", and it's an uncharacteristically sneaky attempt by a grand old company to dodge the UMCA trade deal, lay off American workers and still pay lower taxes.
Our friends at the WSJ don't like the fact that Mr. Trump publicly threatened Deere with a 200% tariff if they try to sneak into Mexico, but I believe, with all respect, The Journal is wrong. Trump is offering Deere and any other company producing in America a massive and profitable cost-cutting plan: lower taxes, lower regulations, cheaper energy, lower inflation, and a sound dollar. These are enormous "America First" on shoring incentives. This Trump plan will put "America First" in the global race for capital.
After all, why should Trump policies reward Deere’s corporate income statement and balance sheet at their Moline, Illinois headquarters, while they slip away to Mexico in order to close plants and kill jobs in the U.S.
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Of course, U.S. manufacturers compete in global markets, but Mr. Trump's whole industrialism plan would slash business and labor costs across the board, and will make America ultra-competitive in worldwide competition and, incidentally, with an ultra-low 15% tax rate, real wage increases would be so substantial that Deere and other companies wouldn't be faced with costly labor agreements.
Mr. Trump is more than willing to use tariffs as a tool to promote American economic security and national security. He is a master negotiator. He is offering tremendous new incentives for job and wage-enhancing business activity. Deere is a grand old company, but it should play by the new rules. That's the riff.
This article is adapted from Larry Kudlow’s opening commentary on the Sept. 25, 2024, edition of "Kudlow."
