Posted on 12/06/2016 2:20:13 AM PST by expat_panama
In the tweet heard round the world, Donald Trump threatened to slap a 35% tariff on companies that shift jobs overseas, then ship their goods back to the U.S.
Since his election, the focus has been on the carrots Trump will offer to grow and protect America's manufacturing base: corporate tax cuts and possibly a side order of state tax incentives. That's the menu that will keep open a Carrier plant in Indiana...
But now Trump is signaling a more combative approach...
...There will be a tax on our soon to be strong border of 35% for these companies," Trump wrote in a series of tweets on Sunday morning...
...Trump's unprecedented use of the Twitter (TWTR) bully pulpit will strike fear in the hearts of industrial firms...
...major stock indexes took Trump's tweets in stride and continued to push higher...
...appreciation of the dollar vs. foreign currencies would, as economists generally expect, further disadvantage U.S. producers.
IBD'S TAKE: As markets assess how Trump's trade policies will work out, U.S. industrial companies that get most of their revenue at home are among the biggest post-election winners, including Nucor, Steel Dynamics and Martin Marietta. Check out IBD Leaderboard to track which stocks are leading the market.
The other threat for U.S. multinationals is that other countries will hold Trump's trade policies against them... ...count on markets to react...
...countries, including Mexico and Canada, are considering the possibility of imposing tariffs on the U.S...
...House GOP tax reform plan, which Trump has not yet commented on, would put a 20% tax on the value of imports while making exports out of the U.S. tax-free. Such an approach would face a challenge before the World Trade Organization and would likely increase global trade tensions.
(Excerpt) Read more at investors.com ...
and here are some of Carrier's tweets (from here):
Memo to anti-Trumpers: people tweet. Deal with it.
I’d like someone to make a compelling case that tariffs would even be successful at addressing what they’re intended to accomplish.
Tariffs were one of the few ways that America made its money early on. It was only after the egregious income tax laws were put into place that we lowered our tariffs and became more global with our manufacturing and shipping. This is exactly how you put America first: lower or eliminate income taxes and increase tariffs. Buy American.
Drastically reduce, or even better, completely remove the corporate income tax.
It’s just a hidden tax on the middle class consumers after all!
Then there won’t be such a problem with business going overseas... I honestly can’t blame them with a 35% corp tax.
Bring all hidden taxes out into the open and let the sunlight shine on them... then people will see things as they actually are.
You need a stick as well as a carrot. This is a stick. The carrot is domestic tax reduction.
Happy Morning everyone! Stocks punched back up above the 50 day MA. otoh it was is lower volume and today's futures are a bit off. Metals are seen weak too and current prices are continuing on the their new level --many of us can settle for that.
Today's reports ought to be fun:
All the news that's fit for lining the bird cage:8:30 AM Productivity-Rev.
8:30 AM Unit Labor Costs - Rev.
8:30 AM Trade Balance
10:00 AM Factory Orders
Trump Inherits Best Economy In a Generation - Chris Matthews, Fortune
Unskilled Manufacturing Jobs Never Existed - Simon Constable, Forbes
To 'Save' 800 Jobs, Trump Kills Exponentially More - John Tamny, RCM
The 'Carrier' of Cronyism Is Evident In Trump's Deal - Mark Thoma, TFT
Trump's Election: Economics, Culture? - Isabel Sawhill, RealClearMarkets
The Fed Needs a New Leader, and New Policies Too - Steve Forbes, Forbes
Trump/Schumer Romance Spells Econ. Trouble - Ira Stoll, New York Sun
Turning the Red States Into Poor, Sickly Paradises - Steven Pearlstein, WP
Actually, They're Leaving the Blue States in Droves - Stephen Moore, WT
What Trump Didn't Learn From Financial Crisis - Noah Smith, Bloomberg
Actually, tariff rates stayed high for many decades w/ the income tax. Finally in the 50's we cut import tax rates and that made import tax revenue soar. People have to learn, that if you want revenue you have to cut rates.
If all you had was the tax cut, the company would take it and still move to mexico. They work together
Post gas taxes at the pump as an example
https://en.wikipedia.org/wiki/Tariffs_in_United_States_history
Yup. The unwashed are too lazy to study tariffs from a historical perspective. They never wonder where federal revenue came from before Federal income taxes.
https://en.wikipedia.org/wiki/Tariffs_in_United_States_history
OK, get ready to be flamed on this issue by the CodeToad.
You want a balanced system between business and income tax otherwise everyone will figure out how to be tax free.
How can we finance the U.S. budget with tariffs when these are the figures we're dealing with?
We had a much smaller government back then. If we said OK no more social security and medicare, many on THIS site would freak out. That’s the reality.
That is an excellent point.
There are obvious risks in protectionism. Trump must be assuming that the US economy is so powerful that it can win any trade or tariff wars with other countries while maintaining domestic productivity at a high level despite decreased competition. I hope he is right.
Wouldn’t it help create a need in the country that could be satisfied by USA manufacturing?
But it’s not tariffs alone. It’s coupled with reduction of income taxes (both individual and corporate) and reduction of crippling regulations to help encourage the formation of US manufacturing.
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