Tax, Trump and Trade: how to halve the deficit

The US trade deficit is not all it seems and President Trump could claim a ‘big win’ should he choose to clamp down on companies’ tax optimisation activities.

Is all what it seems with the US trade deficit? Is it really nearly US$600bn, some 3% of US GDP. We think not. We’ve been looking at how tax optimisation, where companies look for the most efficient way to reduce their overall tax burden, is having an impact on the US trade deficit in goods and services. The results of this study suggest that closing those US tax loopholes could possibly reduce the trade deficit by up to 50%...

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