President Donald Trump gathered the CEOs of several top US companies at the White House on Monday and put them on notice: Move your manufacturing operations overseas, and you’ll face a “substantial border tax.”
Trump promised the group of Fortune 500 CEOs hailing from companies including Ford, Dell and DOW Chemical that he planned to cut corporate taxes “massively” and slash regulations to incentivize companies to stay in the US, but he also warned them they would face a steep border tax to sell their products in the US if they take their manufacturing abroad.
“A company that wants to fire all of its people in the United States and build some factory some place else and then thinks that that product is going to just flow a cross the border, that’s not going to happen,” Trump said, sitting at a table with the group of CEOs and several of his top advisers, including man driving much of Trump’s trade policy behind the scene, senior adviser Steve Bannon.
“If you go to another country … we are going to be imposing a very major border tax on the product when it comes in, which I think is fair,” Trump said. “All you have to do is stay. Don’t leave. Don’t fire your people.”
Sources told CNN last month that Trump was eying an across-the-board tax on imports as high as 10% — an idea business leaders have bristled at.
Trump said he would aim to cut regulations by as much as 75% — including by slashing environmental protections — which would streamline the process for companies to build new factories in the US.
Trump’s warning to business leaders came several hours before he was set to sign an executive order withdrawing the US from the Trans-Pacific Partnership trade deal, making good on a signature campaign promise that also sent signals around the world that Trump is not backing off his protectionist trade rhetoric.
Business leaders have expressed concerns that Trump’s trade policies would lead to a rise in consumer goods because manufacturing costs are higher in the US than they are in developing countries abroad, where many US companies have outsourced manufacturing. Trump made opening remarks with reporters and cameras in the room, but the Monday meeting continued behind closed doors after reporters were led out.
The CEOs gathered Monday represented a several top companies, including Ford, US Steel, Dell, Lockheed Martin, DOW Chemical, Under Armour and Tesla.
Trump’s protectionist trade agenda could also put him at odds with Republican leaders on Capitol Hill, many of whom have been close allies of the business community and have supported free trade deals, including the TPP.