Trump pledges major 'border tax' in CEO meeting at the White House

Donovan Slack, and Marco della Cava

USA TODAY

WASHINGTON — President Trump on Monday pledged to cut regulations by 75% and impose a major "border tax" on goods manufactured abroad and sold in the United States.

Echoing his campaign rhetoric, Trump told business leaders in a breakfast meeting at the White House that businesses spend more time on paperwork complying with government regulations than on making things.

"We want to start making our products again," Trump said. “If you look at some of the original great people that ran this country, you will see they felt very strongly about that.”

He said the border tax would help discourage companies from firing people in the United States, making products overseas, and then moving them back into the country to sell.

"They're going to have to pay a border tax — a substantial border tax," Trump said.

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The president said other countries “charge a lot of tax” when American companies try to sell their products there, and he identified China by name.

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“You want to sell something into China, it’s very, very hard, in some cases it’s impossible,” Trump said. “So I don’t call that free trade, what we want is fair trade, fair trade, and we’re going to treat other countries fairly but they have to treat us fairly.”

The meeting included chief executives from a dozen companies, including Ford, Johnson & Johnson, Lockheed Martin and Dell.

Andrew Liveris, CEO of Dow, said afterward that Trump asked them to come back in 30 days with "a series of actions" that might stimulate manufacturing in the United States.

Liveris said the group discussed the border tax, and who might be helped or hurt by such a move.

Ford CEO Mark Fields said "it was a very, very positive meeting."

Lockheed Martin CEO Marillyn Hewson said in a statement afterward that she was “encouraged by the president’s commitment to reduce barriers to job creation,” including cutting regulations.

“I look forward to continuing to work with President Trump and his team on these important issues,” she said.

Press Secretary Sean Spicer said later Monday that the meeting was productive and ran a lot longer than expected, moving from the Roosevelt Room to the Oval Office, and Trump was eager to hear their suggestions for increasing manufacturing in the United States.

Spicer said it wasn't just about creating jobs, it's about higher-paying jobs. He said Trump plans to meet with the group next month and then quarterly after that.

"I think that’s what his focus is going to continue to be," Spicer said.

What exactly a Trump border tax would look like is unclear. He has previously made similar pronouncements that many interpreted to mean he planned to impose stiff, across-the-board tariffs.

Specialists say such tariffs would increase the cost of imported goods, and thereby increase prices for consumers. And they could hurt American companies that import parts and products from overseas.

Tariffs also could trigger trade wars as countries respond with their own taxes on American goods.

“One doesn’t want to bandy about accusations of starting a trade war lightly, but if, you know, a unilateral imposition of tariffs is pretty close declaration of a trade war as you can have,” said William Gale, co-director of the nonpartisan Tax Policy Center. “The only thing stronger would be to bar the good altogether.”

Scott Greenberg, an analyst at the Tax Foundation, said he believes Trump may be more likely to impose some sort of targeted tax on American companies that move jobs overseas. He pointed to congressional testimony last week by Trump’s pick to lead Treasury, Steven Mnuchin.

Mnuchin told lawmakers that Trump “has in no way contemplated a broad 35 percent border tax.”

“I think when he's referred to a border tax, OK, he's referred to a small number of companies that have moved their jobs, or are moving their jobs, putting products back into the United States, and taxing them,” Mnuchin said.

Greenberg said it would be difficult to speculate on what the consequences of such a tax would be on the economy or consumers without more details.

USA TODAY reached out after the White House meeting to the companies whose CEOs had attended. International Paper did not immediately respond to a request for comment. Four companies — U.S. Steel, UnderArmour, Whirlpool and SpaceX — referred reporters to the White House for comment.

The remaining corporations issued comments from their chief executives that universally praised the meeting as the start of an ongoing dialog about reducing obstacles that stand in the way of U.S. job creation.

“We had a very open conversation with President Trump and members of the new Administration,” said Arconic Chairman and CEO Klaus Kleinfeld in a statement. “I was encouraged that the first meeting on the first full week of the Trump administration was focused on how to increase the competitiveness of U.S. manufacturing firms.”

Kleinfeld said Arconic — which recently separated from aluminum giant Alcoa and focuses on engineering for the automotive and aerospace industries — employs almost 22,000 people in the U.S. “We look forward to working with the new Administration to further strengthen advanced manufacturing in America,” he said.

Echoing that theme was Alex Gorsky, CEO of Johnson & Johnson. “The meeting was productive, and I’m looking forward to working with him and the new congress to support the enactment of polices that will increase America’s growth and competitiveness in these areas,” he said.

The invited companies took pains to stress how many people they employed in the United States, not surprising given Trump’s campaign promise to boost U.S. hiring and his unalloyed criticism of companies that threatened to send jobs overseas.

In past weeks, Trump has made political hay of decisions by Carrier and, most recently, Ford Motor to favor domestic employment plans.

For example, glassmaker Corning, whose CEO Wendell Weeks attended the meeting, noted in an email that about a third of its global workforce, or 13,000 of 40,000 total, is in the U.S.

“This reflects a (U.S. force) growth of approximately 25% over the past 10 years (and) we plan to expand our U.S. manufacturing footprint significantly over the next several years as we invest in growing our Optical Communications, Environmental Technologies, and Life Sciences segments and create several new business opportunities,” the company said in a statement.

Corning plans to spend $10 billion to grow its business over the course of the next two years.

U.S. Steel has 18,000 employees in the U.S. and about 12,000 employees at its steel-making facility in the Slovak Republic, according to the company.

Ford Motor has 85,000 U.S. employees, out of 203,000 globally. “We employ more hourly workers in the U.S. and produce more vehicles in the U.S. than any other automaker,” spokesperson Christin Baker said.

Lockheed Martin employs 98,000 globally, but did not break down the figure into markets.

Growing domestic jobs is one thing, but making sure that the U.S. workforce has the technical skills necessary to fill those jobs is another.

Silicon Valley companies have long been familiar with the challenges inherent in finding tech-savvy workers, although activists have charged that such companies aren’t looking hard enough for women and minorities in their searches.

Contributing: David Jackson

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