2017 February 03 Friday
Republican Border Tax Gets Some Big Corp Supporters

Check out this Reuters article:GE, Boeing, Oracle form coalition to support Republican border tax.

These aren't companies I would expect to be in such a coalition. What is their benefit? Oracle? Are they trying to protect Sun server sales? I do not understand why Oracle is going to be part of this coalition. Boeing: Do they want to put up barriers to import of Chinese passenger aircraft? Boeing is one of America's biggest exporters. They taking this position against Airbus subsidies?

Still, big companies taking a position that isn't as globalist as one might expect. What they might see in it: some Republicans are proposing a cut in US corporate income tax funded by tariffs on imports. That is an interesting proposition. US corporations currently get taxed domestically for profits earned abroad. They see this as an unfair competitive disadvantage and they want to be able to bring back money they made abroad. So basically lower the tariff on imported foreign profits but raise the tariff on imported foreign goods.

Retailers will oppose tariffs as will some manufacturers who have moved much of their manufacturing capacity abroad. But a tariff would be great news for robot makers. Higher tariffs would drive up the demand for equipment that cuts labor out of manufacturing. A tariff would probably speed up the rate of innovation in robotics.

This is a year where a lot of previously frozen solid political deals and rules become unfrozen. A lot of rules are in play. We can expect to see new alliances pop up in business and politics. It is hard to guess just how much the fortunes of different business interests will change. But Trump's changes are likely to cut supply and drive up demand for less skilled labor. That will, combined with the push by Democrats to raise the minimum wage, drive up demand for equipment that automates work.

Share |      By Randall Parker at 2017 February 03 07:20 PM 


Comments
Rev. Right said at February 4, 2017 5:10 PM:

Exporters versus Importers. These companies supporting border taxes are net exporters.


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