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US firms that move abroad will face 35% punitive tax, Trump warns
The US president-elect’s threat, delivered in a stream of six tweets on Sunday morning, comes in the wake of the decision by Carrier, a manufacturer of air-conditioners, to cut its relocation plans in return for economic benefits.
President-elect Donald Trump on Sunday threatened “retribution” and “consequences” for American companies that relocate abroad but hope to sell their products in the US — essentially, a punitive tax of 35% on entry.
The threat, delivered in a stream of six tweets on Sunday morning, reiterates an old position but one that comes in the wake of the decision by Carrier, a manufacturer of air-conditioners, to cut its relocation plans in return for economic benefits.
“The U.S. is going to substantially reduce taxes and regulations on businesses, but any business that leaves our country for another country,” Trump wrote in his first tweet.
He continued, “…fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the US … without retribution or consequence, is WRONG! 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. 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. Please be forewarned prior to making a very … expensive mistake! THE UNITED STATES IS OPEN FOR BUSINESS.”
However, criticism of Trump’s threat came swiftly, and from his own party. “Pres-Elect Trump means well. But won't his 35% tariff idea raise prices on American families? How would it not be a new 35% tax on families?” senator Ben Sasse wrote in a tweet.
Trump ran on the promise of not only keeping American jobs from being shipped abroad, but also bringing them back, and has since his election repeated it every opportunity he got. But his first so-called success, Carrier, hasn’t been one really.
Indiana, which is vice president-elect Mike Pence’s state and from where Carrier was considering relocating to Mexico, has offered the company $7 million in economic benefits over the next few years for retaining at least half of the planned job cuts.
Sarah Palin, a former vice-presidential nominee and an early backer of Trump, slammed the move as “crony capitalism”.
