Donald Trump promises to punish companies that offshore with 35% tax


In a series of tweets Sunday morning, Republican President-elect Donald Trump laid into companies which outsource operations to other countries, promising to impose a 35% tax on them.

Trump said he would incentivize companies to stay with lower taxes and fewer regulations, both key parts of his campaign platform, but made it clear there would be "retribution or consequence" for those that don't contribute to his economic agenda.

"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, then thinks it will sell its product back into the U.S. without retribution or consequence," is WRONG!" Trump tweeted.

"There will be a tax on our soon to be strong border of 35% for these companies wanting to sell their product, cars, A.C. units etc., back across the border," he continued. "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!"


Trump recently reached a deal with air-conditioning company Carrier to keep hundreds of manufacturing jobs from moving to Mexico in exchange for major tax cuts and regulatory benefits. The agreement seemed designed to posture Trump, an ultra-wealthy real estate mogul with an oft-maligned business history, as a champion for workers — though Vermont Sen. Bernie Sanders devoted an op-ed to criticizing Trump's decision to grant Carrier tax benefits, writing "How's that for standing up to corporate greed?"

As the Wall Street Journal wrote, the Carrier deal could speed up existing pressure to provide major subsidies to large corporations, a major factor behind declining government revenues in some states.

But Trump's tirade on Sunday went much further than the Carrier deal, and the president-elect will find it difficult to implement a 35% tariff without alienating many members of his own, generally pro-business, Republican party. As the New York Times noted, under current law, "taxes cannot be directed at specific companies, [so] any tariffs would have to be broad, and broadly painful."

Nebraska Sen. Ben Sasse, a frequent conservative Trump critic, tweeted that Trump "means well" but criticized the tariff as "a new 35% tax on families."

Other figures from around the political spectrum weighed in on Twitter, warning of significant consequences were Trump to impose the tariffs.

Vox's Matthew Yglesias noted Trump's agreement with Carrier, for example, did not preclude the company moving significant numbers of workers to Mexico, meaning it too would qualify for punishment under his newly proposed policy.

Billionaire investor Wilbur Ross, Trump's pick for secretary of commerce, had previously warned such major tariffs could trigger an unpleasant trade war with China or Mexico.

While Trump might be talking tough on offshoring, he has also walked back his heated campaign rhetoric in other ways. After running as a populist opposed to free trade, Trump appointed a cabinet of multimillionaires and billionaires including Ross, former Goldman Sachs executive Steve Mnuchin and Chicago Cubs co-owner Todd Ricketts. He also created an advisory panel of wealthy corporate executives to help formulate his economic policy.

Of course, Trump has largely gone silent on other campaign promises — notably including his pledge to build a massive wall on the U.S.-Mexico border — making his commitment to following through on his tariff pledge suspect.