President Trump is working on legislation that would create new incentives for companies to keep jobs in the U.S. and punish those that move overseas, he said on Tuesday.
Precise details of the legislation could not be learned, and it’s unclear whether it is close to being introduced or still in the drafting stages. But Trump said it has been in the work for a while and kept under wraps.
“Economic-development incentives for companies,” Trump said in a Forbes interview published Tuesday. “Incentives for companies to be here.”
Forbes quoted Trump as saying U.S. companies that move operations to other countries would “get penalized severely … It’s both a carrot and a stick.”
Trump added that the punishment would be making it “very tough for you to think that you’re going to be able to sell your product back into our country.”
Trump has been threatening a version of this since he was a candidate in 2015, saying he would impose tariffs or some type of tax that penalizes U.S. companies that move overseas and then try to sell their goods back into the U.S. But senior administration officials have never followed through on the plan, and it was not included in his recent tax cut package that he is trying to nail down with Republicans in Congress.
The imposition of such tariffs or taxes has split the business community, with some domestic manufacturers saying it would be a good idea and multinational companies worried that it could drive up their costs.
There is no indication yet whether House Speaker Paul D. Ryan (R-Wis.) or Senate Majority Leader Mitch McConnell (R-Ky.) have been involved in discussions about the plan or will allow a vote on the measure. Trump could try to add it to the tax package he hopes to have on the House and Senate floor later this year as a way to court support from Sen Rand Paul (R-Ky.). Paul has voiced concerns that the tax plan, as currently designed, would lead to a giant tax cut for the rich and a possible tax increase for some in the middle class.
But imposing new penalties for companies that move operations overseas could reignite a messy fight that a number of business groups thought they had recently settled.
Retailers, automotive companies, and a number of other firms led Republicans to strip a provision out of the GOP tax plan that would have essentially raised taxes on items imported for sale into the U.S. The provision, often referred to as a border-adjustment tax, was designed in part by Ryan, and it would have created incentives for U.S. companies to export more goods, while also raising around $1 trillion in new revenue over 10 years. But opposition from businesses and even several top officials within the White House killed the idea.
Correction: An earlier version of this article incorrectly said President Trump was collaborating with Sen. Rand Paul on the initiative. Paul is working with Trump on an executive order related to health care.