It's no secret that President-elect Donald Trump has reiterated his campaign pledge to impose heavy tariffs on any company moving U.S. jobs overseas, with a threat to impose a 35% tax on companies wanting to sell their goods back across the border.
Trump's tariff has raised concerns stretching back to the primaries, with economists arguing that it could spark a global trade war. Although Trump's proposal would ostensibly target exclusively U.S. companies, it would still be a broadside against the interconnected economy. And there's good reason that foreign leaders would respond in kind.
It may also not even be legal.
Trump's trade war first
While it's tempting to see outsourcing as an American issue, it's important to remember the critical role that trade played in 20th Century economic development worldwide. The past 60 years have seen global poverty drop to its lowest rate in human history, alleviating suffering and helping to develop local infrastructure in almost every country.
Over a billion people were lifted out of poverty between 1990 and 2010 alone and, as the Economist wrote in 2013, "most of the credit … must go to capitalism and free trade."
Take the Philippines, for example, where outsourced call centers have created more than 700,000 jobs in that country. China, by becoming a global marketplace for cheap labor, elevated standards of living for over 680 million people in just 30 years in a frenzy still referred to as the Chinese Miracle.
Trump's tariff would pull the plug on much of that investment, punishing U.S. companies for opening call centers and factories abroad instead of domestically. If successful it would have a seismic ripple effect on economies all across the world, wrenching hundreds of thousands of jobs from places which have come to depend on them.