Donald Trump recovered his most protectionist discourse the last Sunday. He threatened American Companies with a 35% tax. That was the message for those that move their production out of the USA.
Although the Trump’s threats could sound nationalist and attractive for the most radicals, the approval of a high tax as Trump proposes is on the Congress’ hands. And, if it’s authorized might originate a commercial war as other countries could take retaliation against the USA. There’s a lot of doubts about the Republican party’s’ support for the proposal of higher corporate taxes. After the President-elects’ tweet, the Republican congressman from Nebraska, Ben Sasse, asked how such a tax hike wouldn’t have negative consequences for American families.
According to Donald Trump, “Companies won’t go out of the USA without consequences.” This is problematic rhetoric for the United States. As a capitalistic society the economy is based on cost-effective trade without interference from the government. Lashing out at companies that move overseas for legitimate reasons only hinders free trade.
Neighboring counties are already starting to see real, painful impacts of Trump’s rhetoric. Mexico is currently facing it;s steepest inflation ever in the modern error due to devaluing of their currency by speculators.
The annual average inflation in Mexico has increased in November to 3.31%, the highest monthly rate since December, 2014 when it reached 4.08%.
It’s not the unique problem for the Mexican economy. After Trump’s victory, the economic panorama is not clear for many globalized economies.