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How significant is keeping these manufacturing plants in Mexico and Canada for South Korean companie

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2025-02-07 307

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President Trump promised reduced regulation and pro-business policies to encourage firms to shift their business operations in the United States by lowering the corporate tax from 21% to 15% and possible 25% of tariff to the neighboring Canada and Mexico. Canada corporate tax rate is 26.5% and 30% for Mexico. Combining tariff with the corporate tax, it will be more desirable for Korean companies to have factories in the US. However, I disagree from below two reasons. First, it is uncertain that this ambitious target will be implemented soon. There was a minimum corporate tax deal with 140 signatories. If United States opted out, many countries would come up with the lower tax rate simultaneously. Then it is unsure whether tariff can be implemented due to counter tariff and diplomacy. Secondly, operating expenses in US is unfavorable from the higher wage and currency rate. Considering, export-oriented countries favor weaker currency and cheap labor, the current US is unfavorable.

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Thank you for this Aciel!

President Trump promised reduced regulation and pro-business policies to encourage firms to shift their business operations in the United States by lowering the corporate tax from 21% to 15% and possible 25% of tariff to the neighboring Canada and Mexico. 
>>> OR: President Trump promised regulated laws and pro-business policies to encourage firms to shift their business operations in the United States by lowering the corporate tax from 21% to 15% and possible 25% of tariff to the neighboring countries Canada and Mexico. 
Canada corporate tax rate is 26.5% and 30% for Mexico. 
>>> Canada's corporate tax rate is 26.5% and 30% for Mexico. 
Combining tariff with the corporate tax, it will be more desirable for Korean companies to have factories in the US. 
>>> correct
However, I disagree from below two reasons. 
>>> OR: However, I disagree for the following reasons. 
>>> OR: However, I disagree due to two reasons as follows. 
First, it is uncertain that this ambitious target will be implemented soon. 
>>> correct
There was a minimum corporate tax deal with 140 signatories. 
>>> correct
If United States opted out, many countries would come up with the lower tax rate simultaneously. 
>>> correct
Then it is unsure whether tariff can be implemented due to counter tariff and diplomacy. 
>>> correct
Secondly, operating expenses in US is unfavorable from the higher wage and currency rate. 
>>> Secondly, operating expenses in US is unfavorable due to higher wage and currency rate. 
Considering, export-oriented countries favor weaker currency and cheap labor, the current US is unfavorable.
>>> Considering this, export-oriented countries favor weaker currency and cheap labor, the current US is unfavorable.
>>> OR: With this being said, export-oriented countries favor weaker currency and cheap labor, the current US is unfavorable.

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