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US Tax Cuts Could Be Positive for Business

US President Donald Trump’s tax cuts are expected to encourage manufacturers to return, as well as capital and high-tech personnel, says legal expert

By Han Bingbin Updated Dec.5

US President Donald Trump’s controversial tax cuts are expected to bring at least three types of out-flowing resources back to the US, US-based lawyer Zhang Jun was quoted by the Xinhua News Agency as saying.  

The policy will likely see a return of manufacturing enterprises in the first place, Zhang said. A large number of US companies have moved their factories overseas to avoid federal taxes that can reach as high as 35 percent, according to the legal expert. Some even relocated their headquarters to obtain lower taxes through merging with smaller foreign companies in target countries, he said.  

The tax cuts are also likely to see a growing number of local companies apply for intellectual property rights in the US, according to Zhang, as the tax cut plan promises preferential arrangements for IP rights holders and a better environment for innovation. Capital is also expected to flow back, which should stimulate economic growth and expand employment.  

If combined with immigration policy reform, the tax cut plan will also likely help the US attract a growing number of high-tech personnel from overseas. Although the Trump administration may find it hard to reform the country’s immigration policy as a whole, Zhang said, it seems perfectly applicable for him to make a breakthrough in one single aspect of the policy.  

In all, the plan will likely threaten China’s cost advantage in human resources and other production forces, suggesting that the country should get ready to take the initiative by improving human resources policies and related legal practices.