Mark Cuban Asks What's Better: 'I'm Gonna Hit You With A 200% Tariff, John Deere' Vs. 'I'm Going To Give You Incentives To Manufacture More'

Adrian Volenik

BENZINGA
Fri, October 4, 2024 

Billionaire investor and Kamala Harris proponent Mark Cuban recently weighed in on a key difference between Donald Trump and Kamala Harris regarding their economic strategies for boosting U.S. manufacturing. In a discussion about how to strengthen American companies, Cuban highlighted two contrasting approaches: Trump's aggressive tariff policy and Harris' plan to offer incentives.

As Cuban noted, Trump’s plan includes levying high tariffs on businesses such as John Deere that may decide to relocate manufacturing or outsource jobs elsewhere. “Donald Trump is trying to come in with a hammer and say you’re the nail; I’m going to hit you with a 200% tariff, John Deere,” Cuban said vigorously.

However, Cuban questioned whether such an aggressive tactic helps the economy in the long run, comparing it to Kamala Harris's approach, which focuses on offering incentives to companies to manufacture more within the U.S.

Instead of threatening tariffs, Harris's strategy would offer rewards for keeping production stateside, encouraging companies to invest in American jobs and infrastructure.

“Which do you think is going to work better with companies?” Cuban asked. “Do you want to be underneath a hammer — because when you put a 200% tariff on John Deere and only a 10 or 20% tariff on their Chinese competitors, their Chinese competitors are now less expensive than John Deere.”

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Cuban then pointed to the example of Carrier in 2016. The company faced a 35% tariff under Trump but managed to navigate it by laying off workers instead of returning jobs to the U.S. As Cuban puts it, “They just gamed the system.” He thinks this kind of result is unhelpful and harms American workers more than it helps.

Ultimately, Cuban posed the question: Which is better for U.S. manufacturing—Trump's heavy-handed tariffs or Harris's incentives? For Cuban, the answer is clear: offering companies incentives is the better way forward if the goal is to promote long-term growth, job creation, and economic stability in the U.S.

What Do Economists Think?

Economists tend to be skeptical of high tariffs like the ones Donald Trump has championed. Tariffs drive up the cost of imported goods, pushing consumer prices and production costs for businesses that depend on international supply networks.

Many contend that tariffs can also have unfavorable knock-on consequences on the economy, as they can trigger retaliatory tariffs from other nations, impede international trade, and eventually lower economic efficiency. According to a study by the National Bureau of Economic Research, Trump's tariffs increased consumer prices without significantly benefiting U.S. workers.

On the other hand, proponents of tariffs argue that they can protect critical industries, especially those related to national security or strategic importance. That said, most economists still agree that tariffs are a blunt tool with limited long-term efficacy.


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