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President Trump declares US withdrawal from TPP trade pact

The new US president has signed an executive order to withdraw from the Trans-Pacific Partnership with 12 Asian countries, warning US businesses that they face penalties if they moved production outside the country.

Donald Trump has started to unravel the Trans-Pacific Partnership (TPP) deal with Asia he inherited from his predecessor, as he signed an executive order on Monday to withdraw from the negotiating process. The new US president had vowed during his election campaign to withdraw the US from TPP which he argued was harmful to American workers and manufacturing.

The TPP was negotiated under former President Barack Obama, but never ratified by Congress. Trump's withdrawal from it will not have an immediate effect on US economic policies, although it does signal a new and very different American outlook on trade under the Trump administration.

'Border tax' threat

Earlier on Monday, Donald Trump also reiterated threats to impose a significant "border tax" on companies that move production of products outside of the US to other countries.

Watch video 01:43

How far will Trump's protectionism go?

During a meeting in Washington, he told the chief executives of Ford, Dow Chemical, Dell Technologies, and Tesla that companies were welcome to negotiate with governors to move production between US states. But those businesses that choose to move factories abroad would pay a price.

"We are going to be imposing a very major border tax on the product when it comes in," the US president warned, adding: "A company that wants to fire all of its people in the United States, and build some factory someplace else, and then thinks that that product is going to just flow across the border into the United States - that's not going to happen."

Carrot and stick

At the same meeting, however, Trump said he would seek to cut corporate taxes to the 15 to 20 percent range - down from current statutory levels of 35 percent.

In addition, the new US president promised to cut regulations, saying business leaders had told him that reducing those was "even more important."

"We think we can cut regulations by 75 percent. Maybe more," he told business leaders in the Roosevelt Room of the White House.

Trump said that regulations regarding worker safety would be "just as strong" and "just as protective of the people," adding that current regulations, however, "make it impossible to get anything built."

He also said he planned to hold meetings with American CEOs on a quarterly basis or whenever they wanted to in order to address their concerns.

uhe/mds (Reuters, dpa, AFP)

 

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