President-elect Donald Trump promised in his presidential campaign that he would fight to keep American companies from outsourcing their labor. Now, he has specified exactly how he intends to do that -- with sharp tax increase and "retribution" leveled against companies who move jobs overseas.
"The U.S. is going to [substantially] reduce taxes and regulations on businesses, but any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. ...... without retribution or consequence, is WRONG!" Trump wrote in a Dec. 4 Facebook post.
Though the president-elect has not yet been sworn into office, he has established a precedent for intervening with independent companies to keep them in the country. On Nov. 30, sources close to Trump announced that he made a deal with Indiana-based production company Carrier to stop them from moving an estimated 800 jobs to Mexico, notes The Washington Post. Though Vice President-elect Mike Pence said that the pair intends to work with each company on a case-by-case basis, Trump also vowed to impose a 35 percent tax on companies outsourcing their manufacturing and then selling goods back across the border.
"This tax will make leaving financially difficult, but.....these companies are able to move between all 50 states, with no tax or tariff being charged," the president-elect said on Facebook.
The plan's critics say that it will be detrimental to international trade and significantly dip into Americans' pockets in the long run.
"We think it's bad economic policy," said Club for Growth leader David McIntosh, a former Indiana Republican congressman, according to The Washington Post. "It'll cost more American jobs than it saves. Therefore it needs to be stopped."
Others say that there is little Trump can do if he wishes to follow through on taxing businesses, as that is Congress's job.
"This would be, in my way of thinking, a real intrusion of congressional powers over foreign commerce," said Peterson Institute for International Economics senior fellow Gary Clyde Hufbauer, who regularly supports trade deals. "We've never had this kind of policy before, so he's on novel ground."
Even if it means angering some free trade advocates, the president-elect shows no signs of backing down.
"Please be forewarned prior to making a very expensive mistake!" Trump wrote on Facebook. "THE UNITED STATES IS OPEN FOR BUSINESS!"