President-elect Donald Trump's threat of retribution againstcompanies that move jobs out of the U.S. is already having theeffect he probably intended: Some business leaders are pausingplans to seek foreign addresses.

Ross Baldwin, whose San Diego-based firm Tacna helps U.S.companies set up manufacturing operations in Mexico, said three newclients put their plans on hold until they see what Trump does aspresident.

At the McAllen Economic Development Corp., which assistscompanies seeking to expand across the Mexican border from theTexas city, two of five companies currently considering a move haveput the brakes on their plans because of Trump, said KeithPartridge, the development corporation's chief executiveofficer.

Trump's Twitter vow that companies shifting jobs out of the U.S.will face “consequences” under his administration introduced newand difficult-to-gauge political risk for businesses consideringoffshoring to lower costs. The incoming president's passion for thecause was underscored at his Dec. 1 rally to celebrate an agreementhe reached with United Technologies Corp.'s Carrier unit to keepabout 800 factory jobs in Indianapolis instead of moving them toMexico.

“What they did in Indiana has made it clear to every boardmember in America that there is a clear and present danger inoutsourcing” said Jim Courtovich, managing partner of theWashington public affairs firm Sphere Consulting, who said he hasalready heard from worried business executives.

GN Store Nord A/S looked into moving some hearing-aid productionwork from Minnesota to Mexico earlier this year but put the plan onhold because of U.S. campaign rhetoric, a person familiar with thematter said. GN wants to explore incentives to keep production inMinnesota and whether there would be penalties for relocating jobsto other countries, said another person. Both people asked not tobe named because the discussions are private.

GN doesn't comment on internal deliberations and has “no planswhatsoever” to move its Minnesota production, Anders Hedegaard, CEOof GN Hearing, said in an e-mailed statement. “We have recentlyconsolidated our U.S. production in Minneapolis, where we haveinvested heavily and increased staff. We are very pleased with thelocation.”

Key congressional Republicans have indicated they'll balk at a35% tariff Trump has proposed for companies that move jobs outsidethe U.S. and then export products back to the country. But aspresident, he'll have plenty of other levers of power — chiefly,the bully pulpit.

Some companies are still moving ahead in shifting jobs. RexnordCorp. is planning to move some 300 manufacturing positions toMexico from a ball bearings plant just a mile away from the Carrierplant Trump visited. He attacked Rexnord on Twitter for “ratherviciously firing” the U.S. workers. Rexnord didn't respond torequests for comment about the tweet and its plans for the Indianaplant.

Baxter International Inc., a maker of health-care products, ismoving some production from an Englewood, Colorado, plant toTijuana, Mexico, according to a certified trade adjustmentassistance petition filed by the state government. Some of the workis being done remotely by employees who have remained and “much ofthe work is being transitioned to third-party business partners inthe U.S.,” Baxter said in an emailed statement.

Cardone Industries, a closely held auto parts maker based inPhiladelphia, is moving work to Mexico, affecting 1,300 jobs,according to a trade adjustment assistance petition filed by thecompany. Cardone's human resources director didn't respond torequests for comment.

Baldwin said his clients will watch how Trump responds in suchinstances. Companies that have cold feet from Trump's rhetoric havemerely put their plans on “a pause,” he said, “until we sort outwhat's happening.”

Poll Data

Trump has the public on his side. Seventy-four percent ofregistered voters support a tax hike on U.S. companies that movejobs overseas and 73% say they would have a less favorable view ofa company that moves work abroad, according to a Politico/MorningConsult poll taken Dec. 1-2.

Trump has already mastered the use of invective and Twitter topunish people and institutions that antagonize him. The prospect ofa public shaming is particularly unsettling for corporate insidersused to operating beneath the radar, Courtovich said.

“Board members don't like being put under a microscope and whatTrump is basically saying is they're going to have the HubbleTelescope on them,” Courtovich said. “The public relations play onthis is far more dangerous.”

Trump's Carrier deal has been labeled an example of “cronycapitalism” by a handful of both Democrats and Republicans,including former Republican vice presidential nominee Sarah Palinand Larry Summers, a former top economic adviser to PresidentBarack Obama. But past presidents have at times intervened in theeconomy in similar ways, even if recent presidents have mostlyavoided openly manipulating companies.

President John Kennedy in 1962 publicly criticized steelexecutives for a 3.5% price increase. The steel companies backeddown after the IRS began auditing executives' expense accounts andthe Justice Department opened an antitrust investigation. LyndonJohnson, also sensitive to inflation, ordered his surgeon generalto highlight the health dangers of cholesterol when egg producersraised prices in 1966.

The difficulty in predicting how an irate Trump might respond isespecially unnerving to today's corporate executives, said WilliamReinsch, a fellow at the Stimson Center and former president of theNational Foreign Trade Council, a business association.

“Until the policy clarifies and they have a better sense of howTrump will behave, I think they'll wait,” Reinsch said.

Temporary Delay

The delays may only last about six to nine months, said GarySwedback, president of Mexico operations at commercial real estatebroker NAI Global.

Of companies poised to make their first move into Mexico, abouta third has postponed deals to gain better insight into Trump'splans, he said. A Chicago-based developer working with Swedback wasready to purchase three sites in Mexico to build industrial parks.Now, it wants more clarity on how Trump will treat Mexico.

Swedback is optimistic the current slowdown will provetemporary. It would take an all-out trade war with Mexico, not justselective tariffs, to cause companies to end up canceling plans, hesaid.

“They are telling us very specifically, 'We are only postponingor delaying until we get a better idea of what to expect,”' hesaid. “This time next year, all these investments will be movingforward and the companies will remark that it was too bad they hadto delay six to nine months.”

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