Trump to impose border tax on companies moving production overseas
Washington: US President-elect Donald Trump on Wednesday pledged to impose “a major border tax” on companies that move production overseas and sell goods back to the US.
“When you want to move your plant to Mexico or some other place and you want to fire all of your workers from Michigan and Ohio and all these places that I won, for good reason, it’s not going to happen that way anymore,” Xinhua quoted Trump as saying at his first press conference in New York since winning the presidential election in November.
“There will be a major border tax on these companies that are leaving,” Trump said, but declined to offer more details of the proposed border tax, which would tax imports and create incentives for domestic production.
“You’ve got a lot of places you can move, and I don’t care, as long as it’s within the US, the borders of the US,” he said.
Trump has pressured Ford, General Motors, Toyota and other companies to bring factories back to the US in recent weeks, threatening to impose the border tax on them if they shift production to Mexico.
But US trade officials have warned that such a tax would be likely to face a challenge at the World Trade Organisation and also take US companies out of global supply chains that are now vital in competing internationally.
“If it discriminates against imports, it will raise international trade concerns and, of course, have a significant impact on any consumer or any business that relies on imports as inputs,” US Trade Representative Michael Froman said Tuesday in an interview with Financial Times.