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Trump recommits to "major border tax" on foreign-produced US products

Written by Business World, on 12th Jan 2017. Posted in World

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President-elect Donald Trump on Wednesday promised a "major border tax" on companies that shift jobs outside the United States, further pressuring American businesses days after Fiat Chrysler Automobiles NV said heavy tariffs could force the company to shutter Mexican plants.

Since the Nov. 8 election, Trump has taken to Twitter to call out by name a number of manufacturers with both planned and existing operations outside of the country.

On Wednesday, he returned to the issue in his first news conference since the election. Trump, who will be sworn into office on Jan. 20, warned of a "very large border tax" on companies that shift production to foreign countries.

"You want to move your plant, and you think, as an example, you're going to build that plant in Mexico, and you're going to make your air conditioners or your cars, or whatever you're making, and you're going to sell them through what will be a very, very strong border ... Not going to happen. You're going to pay a very large border tax," he warned.

U.S. automakers in particular have felt the brunt of Trump's ire, as he has called for the industry to return to former manufacturing hubs in the American Midwest from Mexico, which accounts for a fifth of all vehicle production in North America and has attracted more than $24 billion in auto investment since 2010, according to the Ann Arbor, Michigan-based Center for Automotive Research.

Trump thanked Fiat Chrysler and Ford Motor Co for announcements in the past week of investments in Midwestern plants. He added that he hoped General Motors Co, the No. 1 American automaker, would take similar steps to expand U.S. operations.

On Monday, Fiat Chrysler Chief Executive Sergio Marchionne said, "It's possible, if the economic terms imposed by the U.S. administration on anything that comes into the United States that, if they're sufficiently large, that it would make the production of anything in Mexico uneconomical.

"We would have to withdraw," Marchionne said. "It is quite possible."

Trump also reiterated his criticism of Lockheed Martin Corp's F-35 fighter jet program, saying it was "way, way behind schedule and many, many billions of dollars over budget."

After the news conference, Lockheed Martin said in a statement read on CNBC, "We understand President-elect Trump's concerns about the F-35 program and we've given him our full commitment to drive down cost aggressively."

In its annual State of the American Business Address on Wednesday morning, the U.S. Chamber of Commerce, which traditionally has worked in concert with the Republican Party, urged Trump not to add to the "burdens" of exporters by erecting barriers to trade that could hamper economic growth. (Reuters)

Source: www.businessworld.ie

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