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Trump threatens companies that plan to export U.S. jobs

Paul Wiseman
Associated Press

Washington — President-elect Donald Trump is threatening to impose heavy taxes on U.S. companies that move jobs overseas and still try to sell their products to Americans.

But the plan could drive up prices for U.S. businesses and consumers and risk setting off a trade war — if it’s legal to begin with.

In a series of early-morning tweets Sunday, Trump vowed a 35 percent tax on products sold inside the U.S. by any business that fired American workers and built a new factory or plant in another country.

Trump campaigned on a vow to help American workers but also to reduce taxes and regulations on businesses.

Trump tweets “there will be a tax on our soon to be strong border of 35 percent for these companies wanting to sell their product, cars, A.C. units, etc., back across the border.”

He says companies should be “forewarned prior to making a very expensive mistake.”

Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, says Trump would face a potent legal challenge if he tried to impose taxes, known as tariffs, on specific companies without congressional approval.

Hufbauer also doubts that Trump could identify a group of companies —those that move jobs overseas, then ship goods back into America — for special tariffs. “I’m skeptical,” he says, predicting that courts would block such a move.

University of Michigan economist Justin Wolfers saw another problem with Trump’s plan: His proposed tariffs would only hit U.S. companies that build plants overseas. They wouldn’t apply to foreign firms that ship goods to the U.S. “Tariffs are one thing,” Wolfers tweeted. “Tariffs that attack only on U.S. firms are another altogether.”

Trump made the comments three days after he announced that appliance maker Carrier had agreed to reverse its decision to ship 800 jobs from an Indiana factory to Mexico.

During the presidential campaign, he repeatedly threatened to impose tariffs — 35 percent on Mexican imports, 45 percent on Chinese.

A 45 percent tariff on Chinese-made goods could drive up U.S. retail prices by an average of about 10 percent, Capital Economics has calculated.

Consumers would probably have to pay up because there are few alternatives to Chinese-made for many products. China, for instance, produces about 70 percent of the world’s laptops and cellphones.