Trump's 'retribution' tax stirs legal questions, GOP resistance

Donald Trump‘s threats to use taxes as “retribution” against U.S. companies that move jobs overseas are legally dubious, tax specialists say — and they’re prompting resistance from some Republican leaders who fear a coming era of economic protectionism or international trade wars.

“I think there’s other ways to achieve what the president-elect is talking about,” House Majority Leader Kevin McCarthy told reporters Monday, arguing that changing the tax code is the way to entice companies to create jobs and keep them in the U.S.

“I don’t want to get into some type of trade war,” McCarthy said.

In a series of tweets Sunday, Trump warned that “any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S., without retribution or consequence, is WRONG!”

Trump wouldn’t be the first president to unilaterally pursue protective tariffs.

In March 2002, for example, George W. Bush slapped tariffs of as much as 30 percent on steel imports to protect the ailing domestic industry, after his administration concluded that trading partners were engaging in predatory practices known as “dumping.” The move faced international push-back, and 21 months later Bush abandoned the tariffs under threat of a trade war with Europe.

Trump’s threats have the potential to backfire, particularly since Congress may not go along with them.

“This would be a 35% tax on all Americans-a tax that especially hurts low-income families. Maybe the slogan should be #MakeAmericaVenezuela,” Rep. Justin Amash, R-Michigan, tweeted in response to Trump.

With assistance from Lynnley Browning and Billy House

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