Gov. McMaster paints optimistic economic picture for SC in second Trump term, but questions remain By Nick Reynolds 3 hrs ago COLUMBIA — South Carolina's economy reached historic heights under President Joe Biden. As President-elect Donald Trump prepares for the start of his second term later this month, Gov. Henry McMaster believes the next four years will be even better.
Speaking at his second-ever Governor's Economic Summit in downtown Columbia on Jan. 9, McMaster rattled through the highlights. More than $8 billion in new investments were made in South Carolina last year. International trade offices were established in the United Kingdom. And under a Republican president, McMaster hopes even more investment is coming.
"We've been doing better than most states, maybe the best of all," McMaster told reporters. "But a lot of the Biden policies produced record inflation. I think that'll be gone. It's starting to lift right now because people know what President Trump did when he was (in the White House). He allowed business to boom, and it's already booming again. So yes, but his policies will have a very positive impact."
Depending on which part of the economy you're talking about, that is.
Even before Trump has entered office, his administration has floated major shifts in policy with major implications on two of the most visible growth sectors: data centers, which constituted approximately half of all new investment in the state last year, and electric vehicles, which McMaster has made a major economic development priority for the state. Both face their own unique challenges.
A Trump-proposed rollback of plans to electrify the U.S. Postal Service's delivery vehicle fleet has already sent early shockwaves through an Upstate-based defense contractor that had earned a contract from the Biden administration for 10,000 new vehicles, potentially threatening 1,000 jobs.
And after December reports that Trump's transition team was laying the groundwork for a repeal of Biden-era tax credits for electric vehicle purchases, electric automakers have expressed concerns they could cool bullish prospects around the burgeoning industry, with some analysts estimating a repeal could reduce U.S.-based EV sales by nearly 30 percent.
Asked by reporters about his feelings for the industry, McMaster said South Carolina's economic development policies around EVs were simply "following the market," and that their policy was to encourage, rather than force, EV production. But he had little to offer when asked about a potential repeal of those tax credits.
"I don't have any concerns now," he said of Trump. "I've heard him say that but I hadn't discussed it with him. There may be maybe some rollbacks, and maybe partial rollbacks. I don't know what is going to happen, but if that is a strong industry, and I believe it will be, they'll be just fine. I think they could operate without the tax cuts."
Data centers are another story. Where once-tech friendly states like Virginia and Nebraska have begun to recoil from the industry over the massive strains they put on their state's electric grids and water supplies, South Carolina has been largely supportive of the industry, with no plans of slowing soon.
Trump announced recently that a longtime family business partner, Emirati billionaire Hussain Sajwani, would be making a $20 billion investment in U.S.-based data centers. And after more than $4 billion for data centers invested in South Carolina alone last year, McMaster wants a piece of the action.
"We've got, I think, 13 or 14 data centers here, and I think three or four more on the way," he told summit attendees. "Some of the governors said 'we don't want any more.' But everybody knows we have to have them."
While those data centers generate substantial amounts of new property tax revenues, they also pose other problems. Data centers in the Lowcountry have faced scrutiny over their water usage, and a lack of transparency around their environmental impacts.
South Carolina policymakers have also criticized wide disparities between the electric rates paid by residential consumers versus commercial users at a time data centers are driving conversations to add additional fossil fuel generation to the state's strained energy grid.
Whether data centers should pay more for the energy they use, versus the benefits their development provides to their home communities, are competing interests the state is still working to grapple with, McMaster said. While the state needs to be "careful" about the resources they use, he said, data centers ultimately need to go somewhere. And South Carolina will reap the benefits.
"You have all those competing factors, and just like everything else, you've got to find your way through," he said. "But I suppose that plenty of people in the education institutions, as well as in the legislature that are all very aware of all those conflicting forces. And we'll find our way through. But we've got to have plenty of electricity. And we have to have data centers."
"They don't all need to be here," he added.
That's exactly what some want. After the groundbreaking of a new data center in Dorchester County in September, Frank Knapp, founder of the S.C. Small Business Chamber of Commerce and a critic of the state's rapid data center development, wrote in an email blast that he believed the benefits being provided to data centers were "obscene," and that the only reason they were building in South Carolina was because the environment was so amenable to them.
"Our tax dollars are being used to subsidize higher profits by companies like Google while increasing utility costs for the rest of us," he wrote at the time. "We don’t need these data centers to be built here for South Carolinians and our businesses to benefit from artificial intelligence services. If data centers aren’t required to produce most of their energy needs with clean energy, let them build 'anywhere in the world’ but here.”
Some Trump proposals may have little bearing on South Carolina. Where Trump proposed rolling back new Biden limits on offshore drilling, South Carolina's shores are currently subject to a drilling moratorium implemented by the Trump administration several years ago that is active through 2032, and the state has already passed a law rejecting the issuance of any permits off the state's shores.
Asked whether he continued to oppose drilling off South Carolina's shores, or whether he planned to reach out to Trump to keep those bans in place, McMaster was unequivocal.
"Yes," he said.
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