By Ana Swanson
Jeff Immelt, the chairman and chief executive of General Electric, ripped government officials on Thursday over failure to finance institutions such as the Export-Import Bank, calling the decision “pathetic” as he cautioned that protectionist trade policies threaten the American economy.
In a speech at Georgetown University, Immelt criticized the protectionist policies President Trump espoused while campaigning, saying that America’s turn inward has allowed China to take up the mantle of the global leader on trade. Yet he also encouraged the White House to push ahead with its agenda of tax restructuring and infrastructure investment.
The wave of economic nationalism that lifted Trump into office has been echoed in countries around the world, including in Britain’s vote to withdraw from the European Union. And on May 7, French voters will head to the polls to choose between center-left candidate Emmanuel Macron and far-right candidate Marine Le Pen, who has called for closing France’s borders to immigrants and questioned the country’s membership in the European Union.
On the campaign trail, Trump argued for some of the most aggressively protectionist policies discussed in decades. Since coming into office, he has put some of these ideas into practice, but it remains to be seen how far the administration will go to close America’s borders. On his fourth day in office, Trump pulled the United States out of the Trans-Pacific Partnership, an Obama-era trade deal, and he has threatened to do the same for the North American Free Trade Agreement.
In recent weeks, the administration also ordered the Commerce Department to investigate whether imports of steel and aluminum compromise U.S. national security. If the department finds that they do, the U.S. might impose strict penalties on these products. Economists worry that measures of this kind could spark retaliation from other countries in the form of additional duties that would ultimately end up costing the American consumer.
In his remarks, Immelt urged the government to try to modernize and improve on trade deals rather than withdrawing them, adding that “we have the most to lose through protectionism.”
Immelt said the real problem was the current tax system, which he said favors American companies that import goods manufacturing outside the United States over companies that manufacture in the United States and export. “In a country that wants to grow manufacturing jobs and exports, our tax system does the opposite,” he said.
He also urged the United States to do more to support export finance institutions such as the Export-Import Bank. The bank, which offers financial support to U.S. exporters, has been effectively hamstrung by conservative Republicans who criticize the institution as corporate welfare that distorts the free market. In mid-April, Trump announced that he would nominate an outspoken critic of the bank, former U.S. representative Scott Garrett (R-N.J.), as its new head, putting the fate of the institution into question.
Trump opposed the bank during the campaign, but in an interview with the Wall Street Journal in early April, he suddenly reversed his position, saying he had realized that the bank helps small companies.
“So instinctively you would say it’s a ridiculous thing, but actually it’s a very good thing and it actually makes money,” Trump said.