Question

what are the more appropriate policies that the government might use to attract US companies to produce in the United States instead of overseas?

Answer 1

When US companies will produce in the United states instead of overseas it will be beneficial for the US economy as it will result in employment generation, increase in trade, technological improvements, etc., all these factors will contribute towards the sustained & long-term economic growth of the country. The appropriate policies that the government might use to attract US companies to produce in the United States instead of overseas are mentioned below:

a) Reduction in corporate taxes: If US companies have to pay lesser corporate taxes in US than what they are paying when they are producing overseas, then they will prefer to produce in United States instead of overseas. So, such a change in tax system will definitely lure the US companies & they will shift their operations in US to enjoy the new tax benefits.

b) Government support in technological development: Technological improvements in machinery causes growth in manufacturing machinery output. So, by increasing the amount of government support in technological development to improve machinery manufacturing further, US companies can be attracted to produce in US because it will prove beneficial for them to produce in US instead of overseas.

c) Licensing procedures: The procedure to obtain manufacturing licence must be made simple & easier, this will attract the US companies to produce in US. When licensing procedure will be made simple & easier, then it will be easier for manufacturers to set up their businesses in US.

d) Funding & Finance: Various kinds of financial schemes should be formulated in order to support the companies. Government should provide financial assistance to manufacturers in the form of easy loans or grants in order to attract them to produce in US instead of overseas.

e) Investment in supporting infrastructure: Government should maintain & enhance the infrastructure for transportation & utilities in order to support the companies. Investment in supporting infrastructure will attract US companies to produce in US instead of overseas.