President Donald Trump’s election campaign was built on the premises of several fundamental promises. One of them had to do with putting “America First”. As we have already seen, that according to Trump involves putting bans on immigration and forcing companies to move their manufacturing processes the country. We are not sure if these moves will end up benefiting or hurting the US economy in the long run, however, Amazon.com Inc has issued a warning in which it has claimed that these policies could well cause substantial damage to business.
In the description of regulatory risks in its 2016 annual filing, Amazon has said that some of the recent government measures could hurt its growth. Calling out trade protection in particular, Amazon has said that “trade and protectionist measures” could prevent the company from achieving its full potential.
Meanwhile,the fact that Amazon has come out and mentioned the government’s recent acrobatics as a threat to its business and growth is certainly worrying. Amazon is your ideal multinational company, with a business that spans the world. It has huge operations and deals in different verticals. As such, if the company feels that the US government’s current approach is a threat to business — well, I would certainly sit up and take notice.
Of late, the new administration has embarked upon a series of aggressive moves aimed towards getting business to concentrate their processes in the US. The administration appears to be in hopes that by forcing companies to open manufacturing hubs in the country, it would be able to create jobs — as one of multiple benefits. And it is being pretty persuasive as well, backing its words with threat of high tariffs upon companies who manufacture their products elsewhere before bringing them into the US.
Interestingly, these proposals are receiving different degrees of support from different sections of US corporations. While many are linking arms with the new policies and attempting to project themselves in a good light for the government by setting up manufacturing hubs in the country, many other have opposed the move to make taxes unfavorable for those who manufacture or source products from abroad.
Retailers in particular, have said that such a move would likely make goods more expensive for the end customers. Judging by the direction in which the winds are flowing though, the US government appears adamant upon its intent of making the border tax plan into a law.
