Trump is such an interesting character. On the one hand he does business around the world. On the other hand, he caters to frustrated lower-middle class white guys in America who want to keep jobs in America! Can we have it both ways? And what does Trump really believe beneath the hype?
I believe that Trump is likely to increase or create import taxes from certain countries. China is going to be at the top of the list. GM is a company popular with American workers who say the word, “aMERican” with the emphasis on the “MER.” The irony is that GM is all over China getting rock bottom prices on infrastructure and labor during China’s economic recession. Meanwhile Apple who is all over the world taking advantage of regional tax breaks is going to pay big time when Trump clamps down on their manufacturing which is heavily in China. An import tax will harm both these companies in a huge way. I would not be surprised if stocks go down by 25% for both of them.
Meanwhile, the outsourcing business is unique as it is a service. It is harder to track who is doing outsourcing when you look at smaller companies unless the government monitors their Paypal accounts (and it does for tax purposes.) You can see which Paypal payment goes overseas. If the government puts a tax on outsourcing, it might not be so bad. A 20% tax would mean that providers would have to lower their rates by 10-15% to stay in business. Some would go out of business, while others would lower their rates. The customer on the American front would not have to pay that much more after all is said and done.
Personally, I prefer a free and open market. That way the world can capitalize on labor wherever and whenever it can be found. Land for manufacturing might be cheaper in Mozambique than Minneapolis and companies can take advantage of that. But, Trump is sure to fight for some outsourcing taxes. So, don’t cry. You won’t be out of business if it happens — it will only hurt!
On a brighter note, unemployment is so low in America, that prices for services here are bound to rise making it easier for overseas competitors to stay afloat until we have a bad recession.