Trump Threatens to Slap 35 percent on Exiting U.S. Companies

Through a series of Twitter posts this Sunday, President-elect Donald Trump promised to slap a 35% import tax on companies who hire overseas and then try to sell goods back to the states. 

“There will be a tax on our soon-to-be strong border of 35% for these companies wanting to sell their product, cars, AC units, etc. back across the border,” he said. “Please be forewarned prior to making a very expensive mistake!”

For companies who keep business in the states, Trump promised to “substantially reduce” taxes and regulations. Such incentivizing has been a key component of his economic agenda from the beginning. 

Trump’s support of “made in the USA” business is already evident with his recent deal with Carrier – an AC and heating manufacturer in Indiana that was planning to build a plant in Mexico. According to Carrier, Trump’s deal saved 1,100 of the 1,400 it was planning to cut. 

Both Democrats and Republicans have criticizes the Indiana deal as “corporate welfare” or as a federal distortion of the free market, but American Manufacturing President Scott Paul offers a straightforward opinion: 

“Now, hundreds of Indiana workers will now keep good jobs, preserving their place in the middle class. While inducements and high-level interventions aren’t the most efficient ways to keep jobs here, they’re sometimes absolutely necessary.” 

As part of the Trump Administration’s first steps in negotiating with Mexico, House Homeland Security Chairman Michael McCaul (R-TX) has proposed a “security toll” on visitors from Mexico that would help fund Trump’s promised border wall. 

Mexico has hotly refused to pay for the wall, but McCaul insists we can put the nation on a sort of “payment plan” through this toll and immigration fees. McCaul, who is hoping to land the position of Homeland Security Secretary in Trump’s cabinet, told Fox News that visitors from other Latin American nations should also have to pay the fee. 

“Other countries in Latin America have contributed to the crisis – and failed to rein in the chaos – so they should also help pay for these fixes, too,” he said. 

The Texas lawmaker is also pushing to cancel Obama’s deportation amnesties and create a new system to ensure that visitors leave the country when their visas expire.

Editor’s note: Trump risks serious repercussions if he follows through on this. For one thing, it is not so easy to determine which companies are U.S. companies moving overseas, versus companies owned by foreigners. A wrong move could bring international trade to a standstill.

But two things: First, this may be a good move to establish his intentions, his negotiating position and a threat pattern, and second Trump is surrounding himself with good people who will find appropriate ways to actually encourage companies to stay in the U.S.