If this is the reason, it means tariffs on India foreshadows increased movement of US production to India.
Trade revolution
It's necessary because the Tax Cuts and Jobs Act of 2017 let our companies repatriate their overseas profits back to the U.S. tax free. So, now we have U.S. companies setting up shop in overseas tax haves like Ireland and Switzerland, exporting to the U.S. and extracting tax-free profits from the U.S., and repatriating them to the U.S. tax-free.
How is it fair for a company that produces in the U.S. to pay taxes in the U.S. on what it sells in the U.S., while a company in the U.S. that moves production to a tax haven like Ireland or Switzerland gets to earn tax free profits in the U.S.?
Last year, American companies in Ireland exported $103 billion to the U.S., while the whole country only bought $16 billion for the U.S.. Now they're piling into Switzerland, were we sold $28 billion in the first six months of 2025 and imported $75.8 billion.
If this is not stopped, companies will continue moving production out of the U.S. to use other countries as tax havens, cheap labor pools, or both, to extract profits tax-free from the U.S., while our companies and our people become ever more burdened with taxes and our government ever more burdened with debt.
For that reason, every other country imposes a VAT tax on foreign imports to tax the value created overseas sold in their countries. We call it a tariff. It is necessary to square the trade between us and the rest of the world.
