President elect Donald J Trump took to Twitter last week to promise punitive actions for those companies who left the US. It’s hardly the sort of free trade beliefs he pushed during the election, and a nightmare scenario for US business.
Mr. Trump outlined what could become one of his legacy policies as President of the United States in a tweetstorm.
Mr. Trump first tweeted,“Just tried watching Saturday Night Live – unwatchable! Totally biased, not funny and the Baldwin impersonation just can’t get any worse. Sad”
He then launched the bombshell US business policy on which there will be a tax for US companies, who re-incorporated abroad, to sell their products back to US businesses and consumers.
That Mr. Trump fails to distinguish between small and big companies – “any business” he tweets – could have implications for thousands of small and family businesses.
“The U.S. is going to substantially reduce taxes and regulations on businesses, but any business that leaves our country for another country,” Trump’s first tweet of on the subject begins, “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! There will be a tax on our soon to be strong border of 35% for these companies …..”
Trump spells out why: this will make it harder for US companies to escape.
Across the tweets, the President essentially threatens US companies, offering back nothing more than a promise of future low taxes for those who obey.
“these companies are able to move between all 50 states, with no tax or tariff being charged,” he tweets. “Please be forewarned prior to making a very …expensive mistake!
In a truly Orwellian ending, Mr. Trump tweets: “THE UNITED STATES IS OPEN FOR BUSINESS”
We were watching when last week Mr. Trump declared at a rally in Indiana, “companies are not going to leave the US anymore without consequences.” We waited for him to elaborate. He has.
CEO’s are asking, ‘Who’s next?’ in context of last week’s Carrier deal.
Sarah Palin called that deal “crony capitalism.” Mike Pence denied it. Mr Trump, meanwhile, uses the Carrier deal as an example of a business first approach.
Mr. Trump’s actions could disrupt balances in the ‘Chimerica’ arrangement with China, prompting a trade war so soon as his first 100 days in office.