NEW YORK: As the United States debates trade and immigration, the president has shown a preference for pressing the inward priority of his core backers. The most dramatic example came after the murder of a woman in New York. Trump didn’t mention trade in his speech, but rather addressed the need to patrol and tighten borders, a policy which has long been considered to be a fair trade-off between policy and the need to deter criminals.
The president’s protectionist rhetoric has changed, though, over the past two weeks, and it has provided a rare rhetorical signpost of his new policy preferences. In that context, his tweets on May 26 deserve a closer look.
“WE ARE NO LONGER A COUNTRY THAT WILL ACCEPT NOTHING BUT THE BEST WHEN IT COMES TO OUR PEOPLE”, wrote Trump.
His reference was to talks between US and Mexican authorities which were seeking to finalise an agreement on border security. Trump’s tone was strong. Immigration reform was back on the agenda. So was border control. And the president seemed to be prepared to let Mexico impose stricter border controls without losing its economic sovereignty.
The US business community has been losing faith in his economic agenda for years. Most significant, the president’s threats to fire US trade negotiators and impose tariffs on US imports raised doubts about the relationship between corporate executives and the government. Trump’s tweets set out his vision of the US economy.
The president’s short but sharp indictment of Amazon was another indication that he has taken a more protectionist stance on immigration. He singled out the company for criticism, saying it “never pays what it should be paying and never has”. It followed suit, coming out with a statement saying it “engages in tax strategy that is different from other retailers”. Amazon has indeed been aggressive in cutting the tax bill of its multinational parent Amazon.com Inc, through frequent tax write-offs, but this shouldn’t be read as an endorsement of an aggressive tax strategy.
The bulk of US companies, however, pay their taxes, as Trump also noted. They don’t move profits offshore, they do so in a smart way. Remember the debate over tax inversions? Our governments don’t approve them because their incentives discourage investment. Inversions also result in the US losing out on untaxed income, which does need to be taxed. But this misses the point. The story isn’t about tax evasion, it’s about how profits are earned, and invested. It’s much more complicated than that.
Trump cited the H1B visas as an “outright abuse” of trade by technology companies. H1B visas have been the subject of much debate, and in the last couple of years have begun to see some tightening. On May 30, the administration announced it was considering steps that would limit the total number of visas that could be issued for each computer-science program. It’s not clear why. But the administration has taken a hard line on technology firms moving their operations abroad in the past two weeks.
These comments suggest that while the president can change his tone and references, he has not changed his priorities.
The people Trump refers to are often non-immigrants. They are both immigrants and non-immigrants, even if they don’t know it. Immigrants need other factors to set them apart: legal rights and a well-developed legal system to provide for their protection, and protection from abuse and predatory foreign investors, for example. Their “western-style culture” also comes with extra protections, and special interests in the businesses that come to depend on them. Non-immigrants, by contrast, make up a huge part of the majority of the US population, along with many college graduates, and the vast majority of its tech-sector talent.
Immigrants and non-immigrants complement each other. There’s nothing wrong with immigration but there is a special need for non-immigrants as a bulwark against the offshoring that’s a big part of the economic future of the US. It will be up to a hostile president to make sure they don’t pay more in taxes than they need to for the privilege of running.
A win for the billionaire investor and politician Richard Sherman and others who want to block H1B visas has been described as a big gain for Trump’s critics. But we would do well to keep in mind that many anti-immigration fans, from firms like Trump’s to groups like TechNet, are also anti-intellectual elites. More than one of them or their organisations is headquartered in Silicon Valley, and a lot