Trump warns companies against outsourcing abroad

MANILA, Philippines — US President-elect Donald Trump on Friday warned American companies of consequences if they try to outsource their operations to other countries.

Speaking in a factory of air-conditioning contractor Carrier in Indianapolis, Indiana,  Trump said his government will not make it easy for companies to leave and source workers in Mexico, India and other countries.

"Companies are not going to leave the United States anymore without consequences. It's not going to happen. I'm telling you right now. We're losing so much," Trump said.

"We're gonna have a lot of phone calls to companies when they say they're thinking about leaving this country, 'cause they're not leaving this country. And the workers are not gonna leave their jobs," he added.

He said companies can negotiate deals in different states, but choosing to go abroad "is going to be very, very difficult."

Trump said outsourcing companies will be taxed heavily across the border, while those that choose to stay will benefit from a reduced corporate tax rate.

"So one of the things we're doing to keep them is we're going to be lowering our business tax from 35 percent, hopefully down to 15 percent, which would take us from the highest taxed nation virtually in the world—this is terrible for business—to one of the lower taxed," the incoming US leader said.

Tax analysts in the US say, however, that Trump's tax plan would lead to government revenue losses of $6.2 trillion, thereby hurting the economy. Others argue that the the richest taxpayers would see their incomes increase significantly.

Local BPO sector

In the Philippines, where nearly three fourths of BPO earnings come from the US, economists fear Trump's White House term will be a blow to the local outsourcing sector.

BPOs in the Philippines have generated 1.2 million jobs. Last year, the sector earned P1.7 trillion in revenue, contributing almost 10 percent of the country's gross domestic product, a value at par with remittances from overseas Filipinos.

"I'm worried about a recession," John Forbes, senior adviser at the American Chamber of Commerce in the Philippines, told the STAR earlier this month.

Socioeconomic Planning Secretary Ernesto Pernia, meanwhile, said the country is ready for a possible protectionist America under Trump due to its foreign policy pivot to China.