Trump orders TPP withdrawal

Donald Trump has signed an executive order that will pull the US out of the Trans-Pacific Partnership Agreement, as signalled in his campaign.

He has warned business leaders he will impose “very major border tax” if companies move their manufacturing out of the US. Unless he also acts on the huge number of companies who already manufacture outside of the US this will give existing off shore manufacturers a big price advantage.

He has also said he intends slashing company tax rates from 35% to 15% or 20%.

BBC: Trump executive order pulls out of TPP trade deal

President Donald Trump has fulfilled a campaign pledge by signing an executive order to withdraw from the Trans-Pacific Partnership (TPP).

During his presidential campaign, Mr Trump criticised the TPP as a “potential disaster for our country”, arguing it harmed US manufacturing.

“Great thing for the American worker what we just did,” said Mr Trump as he dumped the pact with a stroke of a pen.

This was well signalled.

He also cut funding for international groups that provide abortions, and freezed hiring of some federal workers.

Also on Monday morning, Mr Trump pledged to “massively” cut regulations and taxes on companies, but impose “a very major border tax” if they move factories outside the US.

“All you have to do is stay,” he told executives from 12 companies including Lockheed Martin, Under Armour, Whirlpool, Tesla and Johnson & Johnson.

After meeting the business leaders in the White House, Mr Trump pledged to lower corporate taxes to 15% or 20%, from the current 35%, and slash regulations by up to 75% if they keep jobs in the US.

As promised Trump will radically change business and trade regulations, tariffs and taxes for the US. How this will affect the US and the rest of the world is unknown – there is certain to be negative effects and unintended consequences.

When the world’s largest economy gets a good shake up it’s anyone’s guess what will froth over the top.

26 Comments

  1. Gezza

     /  January 24, 2017

    The continued silence around whether he will impose import taxes on companies that have already offshored their manufacturing is puzzling. The question has been being asked for some time now.

    • If he doesn’t it will make it a very uneven playing field for new manufacturing or new attempts to reduce costs by going offshore.

      And if he puts import taxes on existing offshore manufacturers it will be very unpopular and will push up prices on many goods.

      • artcroft

         /  January 24, 2017

        I guess it’s a race to automate your production line fully. No expensive US workers required. Oh and lovely low taxes.

        • No no no, it’s going to put millions of jobs back into the rust belt. He promised, and you can always trust what he says.

          But I’m a bit confused. Wasn’t it said he was popular because he wasn’t a politician?

          But now he’s excused from lying because that’s what politicians do?

        • Gezza

           /  January 24, 2017

          There is wall, with sections of fencing, to build, I understand. Also some roads & bridges.

      • Conspiratoor

         /  January 24, 2017

        You may be an astute political commentator pg but you need to learn to read between the lines. Understand the subtle nuances involved in the art of negotiation, the power of leverage and the opening gambit. Cheers,c

        • Gezza

           /  January 24, 2017

          Rubbish. Details later.

          • Gezza

             /  January 24, 2017

            Cancel above. You might be on to something.

            • Gezza

               /  January 24, 2017

              Nope – no clarification provided by c, despite ample opportunity.
              Rubbish reinstated as the operative term.
              1802 hours.

            • Conspiratoor

               /  January 24, 2017

              G, wasn’t aware you were seeking clarification. What part of …Oh never mind. When you extricate yourself from this circular loop refer to sir Al

            • Gezza

               /  January 24, 2017

              Rubbish. Details below.

        • I hate to say it Conspiratoor but you could be right …

          Obviously the U.S. needs MORE leverage and MORE power …

          In 4 years there’s going to be no type of President left to disappoint the American people, other than a woman and then perhaps a black woman?

          • Conspiratoor

             /  January 24, 2017

            Hate is a wasted emotion parti. Say it without malice and you might live longer.
            Black, white, XY, XX who cares. Can we just settle for a president and judge hiser on their actions? As an old Zen monk once told me, ‘words can’t even move the leaves on the trees’

    • @ Gezza – ” … whether he will impose import taxes on companies that have already offshored their manufacturing”

      As I recall, the Trumpet did carefully say only on companies leaving after he becomes President. Pretty safe ground IMHO. Those who intended going have long gone …

      So, surprize, surprize …. he was being a politician all along …

      • Gezza

         /  January 24, 2017

        After ponderation, I surmised that c might have been hinting above at a belief that the DOTUS may be planning something that will incentivise US companies that have already ripped off US workers by exploiting cheap non-American labour to re-establish operations in The Homeland. It is difficult to say with certainty if that is what he means though. If I might be permitted to split an infinitive here, he is deliberately being inscrutable.

        • Kitty Catkin

           /  January 24, 2017

          Where’s the infinitive ?

          I can’t see it being as simple as he’s making it out to be.

          Shoppomart (like our Warehouse) sells x million $ worth of Asian goods. They have, of course, contracts with the Asian companies and the transport companies that move these. They pay their staff according to the amount that they make. They are now forced to sell US made items. The US factories have to be built. Machinery & materials have to be found, Staff have to be trained.And so on and so on.

          What happens to the existing contracts and commitments ?

          What happens in the interim about the stock needed ?

          What happens when prices soar and wages don’t ?

          The new stock costs 5x as much, Shoppomart still has to make a profit.They can’t. The profit % in businesses like this is actually quite low. The power & petrol bills and other costs won’t drop to allow for this change. Staff will be laid off. Shoppomart’s profits plummet. Shoppomart goes bust. The workers do, too.

          • Gezza

             /  January 24, 2017

            I adverbally ruptured the verb to be.

            These other matters you raise I trust c or some other business magnate here will address on my behalf.

            • Kitty Catkin

               /  January 24, 2017

              Well, it’s an over-simplification, which should be obvious, but these things can’t just happen because someone says so ! It needs a lot of thought and planning. People are used to cheap consumer goods. And suppliers need time to set up the supply-they can’t just supply things on demand, nor can they keep the prices at the level of Asian goods’ prices.

              I bought 3 pairs of fluffy socks today because my existing ones are a bit tired and I loved these ones’ colours…had they cost $8 a pair instead of $2, I would have made the old ones last a bit longer.

  2. Jeeves

     /  January 24, 2017

    45% + of US GDP goes to military…. Trump’s plan is to convert some of it into infrastructure, convert soldiers into builders, show pictures of white boys with pick axes, instead of guns, on American roadsides instead of Afghani wastelands. Get shit moving- inspire home grown risk.. improve the arteries for easier business and then see what the hell happens….

    He is a complete asshole- but this is exactly the plan USA needs- and what the people who voted for him desperately want.

    • @ Jeeves – and yet I recall hearing Trump is going to increase military spending as well?

      I wonder how those goals fit together …?

    • Conspiratoor

       /  January 24, 2017

      Correct jeeves. To my knowledge Americans were not asked to elect the pope

  3. Kitty Catkin

     /  January 24, 2017

    Can he do those things single-handedly ? The PM couldn’t. The idea that someone who’s never had any political experience could have the power to stuff up a country’s economy is appalling. Surely not. Why bother to have a government if the president is a dictator ?

  4. Alan Wilkinson

     /  January 24, 2017

    At the end of his first day in power he hasn’t built a wall across his southern border or put millions of jobs back into the rust belt yet.

    No wonder PG is disillusioned.

    • Gezza

       /  January 24, 2017

      Understandable, as you say. I for one expected much more of the DOTUS than just a knob wave on his first excursion.

    • Conspiratoor

       /  January 24, 2017

      MDM introduced a lot of jihadis to their virgins today Al. Does that count?