Trump Vows 'Big Border Tax' For U.S. Manufacturers That Move Jobs Abroad President Trump has suggested an import tax of up to 45 percent on goods made by U.S. firms overseas. But it's illegal to single out individual companies and it's unclear what form the tax would take.
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Trump Vows 'Big Border Tax' For U.S. Manufacturers That Move Jobs Abroad

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Trump Vows 'Big Border Tax' For U.S. Manufacturers That Move Jobs Abroad

Trump Vows 'Big Border Tax' For U.S. Manufacturers That Move Jobs Abroad

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ARI SHAPIRO, HOST:

In its first few days, the Trump administration has welcomed corporate leaders to the White House. Today it was executives of the three big automakers. Here's what President Trump told them during their meeting.

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PRESIDENT DONALD TRUMP: We're bringing manufacturing back to the United States big league. We're reducing taxes very substantially. And we're reducing unnecessary regulations.

SHAPIRO: The president said his administration will be among the most business-friendly in the world. At the same time, as NPR's John Ydstie reports, Trump is also threatening companies that move jobs and factories overseas.

JOHN YDSTIE, BYLINE: During the transition, President-elect Trump began singling out companies - from Carrier to Ford and GM - who were planning investments in Mexico that would involve moving U.S. jobs. In his GM tweet, Trump promised a big border tax on Chevy Cruzes shipped from Mexico into the U.S. He repeated that threat to corporate leaders yesterday.

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TRUMP: A company that wants to fire all of its people in the United States and build some factory someplace else and then thinks that that product is going to just flow across the border into the United States - that's not going to happen. They're going to have a tax to pay, a border tax, a substantial border tax.

YDSTIE: Trump has suggested the tax could be 35 to 45 percent of the value of the product. Exactly what form the tax would take is unclear. House Republicans have their own idea. They've talked about a steep border adjustment tax on all goods coming into the country, part of their plan to overhaul the tax code. But both Trump and his nominee for Treasury secretary, Steven Mnuchin, have said that's not what they're contemplating. Here's Mnuchin at his confirmation hearing last Thursday.

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STEVEN MNUCHIN: What he's suggested is that for certain companies that move jobs - OK? - that there may be repercussions to that.

YDSTIE: But Steve Charnovitz, an international trade specialist at George Washington University Law School, says the Trump administration doesn't have the legal authority to do what it's threatening.

STEVE CHARNOVITZ: To impose a tax or a tariff on a company merely because it moves its production outside the United States and seeks to reimport goods or import goods would be illegal.

YDSTIE: Charnovitz says presidents do have authority to levy tariffs on individual nations and products, but not on individual companies. Trump might try to target a specific company without naming it by defining the offending product in detail - for instance, a 5-door, 3,200-pound four-cylinder car. But Charnovitz says that's not likely to work.

CHARNOVITZ: And I think if he tried it, it would get struck down by federal courts. And the bigger issue is it's a crazy idea. I mean, here's a president who campaigned on making America great again, and he's offering these counterproductive trade policies that can only make it worse for the U.S. economy and for American workers.

YDSTIE: That said, Charnovitz says he understands why some workers who lost their jobs to trade voted for Trump.

CHARNOVITZ: The Obama administration did a terrible job in trying to explain the benefits of trade.

YDSTIE: And Charnovitz says for decades, the federal programs that were supposed to help workers and communities hurt by trade have not done a good job. John Ydstie, NPR News, Washington.

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