Business

Twitter threats against companies come up trumps for Trump

WASHINGTON Donald Trump has not yet taken office, but he is already boasting that his election has restored confidence in the American economy, boosted confidence and saved jobs.

With a series of tweets, he has singled out several major companies and demanded they bring factories back to the United States to boost manufacturing and employment.

Several quickly complied.

American carmaker Ford cancelled construction of a plant in Mexico to instead invest in the US and create 700 jobs, citing a "vote of confidence" in the economic agenda of the incoming president.

Last month, Carrier backed off on a planned transfer of 1,000 jobs to Mexico after a deal with Mr Trump - and for US$7 million (S$10 million) in tax cuts.

"Before there was any chance that he would be elected, no one paid much attention to his programme, which is what companies want: a lot of deregulation and tax cuts," analyst Ms Aparna Mathur, of the conservative think tank American Enterprise Institute, told AFP.

Several economic indicators also reflect this renewed sense of optimism. A December Philadelphia Fed survey showed the proportion of companies confident in the future doubled in one month, while household confidence reached its highest level in 15 years.

"Thank you Donald!" the president-elect said in a self-congratulatory tweet.

TWEETS

His unprecedented strategy of tweeting his complaints against major companies - including General Motors, Ford and Toyota - and issuing threats if they don't invest in the US, could prove to be worthwhile.

CEOs also seem to be getting the message."We are pragmatic, we will adapt to any situation," said the chief of the Renault-Nissan alliance, Carlos Ghosn, speaking at the Consumer Electronics Show in Las Vegas.

"There's a general sense that more things will be able to get done because the US government is now unified behind the Republican Party," Mr Mark Zandi, chief economist at Moody's, told AFP.

But experts say it will take much more to convert this honeymoon of optimism into a durable phenomenon.

And numerous questions remain.

Trump has promised a vast infrastructure spending plan, but the details are fuzzy and could burden public finances.

Finally, the trade war that Trump threatened to wage against China and Mexico could change the mood of American multinationals that depend heavily on their overseas activities, especially as the dollar strengthens and makes their exports more expensive.

"We have to see what he has in mind exactly, and what he actually executes on," Mr Zandi said.

Mr Jared Bernstein, former White House counsellor under President Barack Obama, is more definitive, predicting a tough road ahead if Trump implements his programme of deregulation and tax cuts. - AFP

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