Trump threatens payback for US companies that move abroad

Trump threatens payback for US companies that move abroad

President-elect Donald Trump wrote a series of tweets early Sunday morning in which he threatened "retribution" in the form of a 35 percent tariff on USA companies that move overseas.

US President-elect Donald Trump has warned US companies wanting to set up business overseas of dire consequences if they "leave our country for another country".

The threat of higher tariffs on goods produced by United States factories overseas coming back into the country is part of Trump's plan to incentivize businesses to stay in America.

"Tariffs are one thing", Mr Wolfers tweeted.

It's the latest salvo in a crusade against outsourcing that claimed a victory this week after heating and air conditioner manufacturer Carrier agreed to keep some of its jobs at an in factory from moving to Mexico.

But Trump's tirade on Sunday went much further than the Carrier deal, and the president-elect will find it hard to implement a 35% tariff without alienating many members of his own, generally pro-business, Republican party.

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- Donald J. Trump (@realDonaldTrump)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.

The elliptical announcement follows a week in which Trump bragged about his ability to persuade USA corporations to reconsider moving jobs overseas. While Treasury secretary pick Steven Mnuchin and Commerce secretary pick Wilbur Ross have softened some of Trump's more aggressive rhetoric on trade, his Twitter comments do suggest a policy that will include both carrot and stick.

A 45% tariff on Chinese-made goods could drive up U.S. retail prices on those goods by an average of about 10%, Capital Economics has calculated. The Peterson Institute calculates that a 2009 tax on Chinese tires cost American consumers $1.1 billion in higher tire prices - equal to more than $900,000 for every job saved in the domestic tire industry. China, for instance, produces about 70% of the world's laptops and mobile phones.

Taxing foreign goods could also start a trade war.

The Global Times, a Chinese newspaper, has already warned that China could retaliate by limiting sales of U.S. cars and iPhones and by ordering aircraft from Europe's Airbus instead of America's Boeing.

Outlining complex United States tax policy on Twitter has its limitations.

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