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<ul class="summary-list"><li>The tariffs Donald Trump proposed while campaigning could help create US semiconductor jobs.</li><li>Tariffs could also help US chipmakers compete with companies abroad that sell chips at lower prices.</li></ul>If president-elect Donald Trump follows through on his <a target="_blank" href="https://www.businessinsider.com/companies-raising-prices-trump-tariffs-inflation-goods-getting-more-expensive-2024-11">campaign promise to impose tariffs</a>, the domestic semiconductor industry could see job gains.Industry experts told Business Insider that tariffs on foreign-made chips could help level the playing field for US chipmakers, which are <a target="_blank" class="" href="https://www.businessinsider.com/intel-chip-troubles-problem-us-economy-domestic-production-chips-act-2024-11">facing fierce competition</a> from their counterparts abroad. The tariffs could also encourage US businesses to source more chips domestically and help persuade chipmaking giants, like the Taiwan-based <a target="_blank" href="https://www.businessinsider.com/tsmc-making-apple-iphone-chips-helps-us-semiconductor-bet-2024-10">TSMC</a>, to keep building factories in the US. These developments could aid job growth in the US semiconductor industry, though experts disagreed on how much.Trump's proposed tariff policies include a 60% tariff on goods coming from China and up to a <a target="_blank" class="" href="https://www.businessinsider.com/companies-raising-prices-trump-tariffs-inflation-goods-getting-more-expensive-2024-11">20% tariff</a> on all imports, including chips. US companies source many of the chips needed to power items like iPhones and washing machines from abroad: The US share of overall chip production fell from <a target="_blank" href="https://www.businessinsider.com/why-us-doesnt-make-chips-semiconductor-shortage-2021-4">37%</a> of the world's supply in 1990 to roughly <a target="_blank" href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/08/09/fact-sheet-two-years-after-the-chips-and-science-act-biden-%E2%81%A0harris-administration-celebrates-historic-achievements-in-bringing-semiconductor-supply-chains-home-creating-jobs-supporting-inn/#:~:text=As%20a%20result%20of%20these,Vice%20President%20Harris%20took%20office.">10%</a> today.In an <a target="_blank" href="https://open.spotify.com/episode/0e9ynAH6hmZIIeOx0SaGQu">interview</a> with podcaster Joe Rogan in October, Trump criticized the Biden administration's <a target="_blank" href="https://www.businessinsider.com/intel-chips-act-funding-all-hands-meeting-2024-11">CHIPS Act</a> legislation, which included $52.7 billion in tax breaks and subsidies for companies in the semiconductor industry. He said that the federal government should have implemented tariffs instead to motivate global chipmakers to build more factories in the US, which would then create jobs."You didn't have to put up $0.10," Trump said. "You could have done it with tariffs. You tariff it so high that they will come and build their chip companies for nothing."To be sure, the impacts of a tariff policy on chips could be mixed. Jeff Koch, an analyst at the semiconductor research and consulting firm SemiAnalysis, told BI that tariffs could lead to higher prices for goods containing chips, such as cars, electronics, and appliances. He added that US chipmakers could likely benefit from these tariffs because it could help them compete with companies abroad that sell chips at lower prices.The Trump campaign did not respond to a request for comment.<h2 id="dc733634-a51d-47cf-a7b9-405bdfac9e61">Tariffs on chips could boost construction and manufacturing jobs</h2>Patrick Moorhead, founder, CEO, and chief analyst at the research and advisory firm Moor Insights and Strategy, told BI that tariffs could increase the number of US chip manufacturing jobs. He added that he thinks the policy could incentivize chipmakers like TSMC and Samsung, which is based in South Korea, to boost manufacturing in the US."The cost of manufacturing in the US for Samsung and TSMC would be lower than a 30% to 40% tariff on <a target="_blank" href="https://www.businessinsider.com/quartz-mine-computer-chips-hurricane-helene-spruce-pine-semiconductor-2024-9">wafers</a> and <a target="_blank" href="https://www.businessinsider.com/us-ai-chip-production-manufacturing-nvidia-labor-china-taiwan-korea-2024-4">packaging</a>," he said, referring to key components of the chipmaking process.Jeff Ferry, chief economist at the Coalition for a Prosperous America, a nonprofit that advocates for increasing domestic manufacturing, estimated that tariffs could create roughly 100,000 jobs at US chip manufacturers and their suppliers.He said this estimate was partly based on a <a target="_blank" class="" href="https://www.semiconductors.org/wp-content/uploads/2021/05/2021-Jobs-Report_2-pager.pdf">report</a> published in 2021 by the Semiconductor Industry Association — a trade association and lobbying group — that said a $50 billion investment would help create an estimated 10 additional chip factories in the US. That could add about 42,000 direct jobs at the companies building these factories and 101,500 indirect jobs at chipmakers' suppliers, per the report.Ferry said he thought chip tariffs could lead to the creation of roughly 10 additional factories, which led him to come to the 100,000 jobs estimate. In August, the White House <a target="_blank" href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/08/09/fact-sheet-two-years-after-the-chips-and-science-act-biden-%E2%81%A0harris-administration-celebrates-historic-achievements-in-bringing-semiconductor-supply-chains-home-creating-jobs-supporting-inn/">said</a> that investments supported by CHIPS Act funding would help create 115,000 construction and manufacturing jobs."Tariffs on chips, particularly legacy chips like those used in autos, could successfully shift production back to the US," Ferry said.Samsung did not respond to a request for comment. Intel and TSMC did not respond to a question about what impact a Trump administration tariff policy would have on each company's job creation plans in the US.An Intel spokesperson pointed to a <a target="_blank" href="https://www.intel.com/content/www/us/en/newsroom/news/us-chips-act-intel-direct-funding.html#gs.i5ie0q">press release</a> from March, which said the company's $100 billion investment in the US over the next five years is expected to create more than 10,000 jobs at Intel and nearly 20,000 construction jobs. TSMC pointed to a <a target="_blank" href="https://pr.tsmc.com/english/news/3122">press release</a> from April, that said TSMC's investments in three Arizona chip factories are expected to create roughly 6,000 company jobs, more than 20,000 construction jobs, and tens of thousands of indirect supplier and consumer jobs.Stephen Ezell, the vice president for global innovation policy at the Information Technology and Innovation Foundation, said that the effectiveness of a tariff on chips could be limited, in part because many chips aren't imported <a target="_blank" class="" href="https://www.usitc.gov/publications/332/executive_briefings/ebot_cellular_phones_and_covid.pdf">directly</a> into the US: He said they often come embedded into finished products like <a target="_blank" class="" href="https://www.usitc.gov/publications/332/executive_briefings/ebot_cellular_phones_and_covid.pdf">smartphones</a> or computers.For example, he said that in most cases, chips that TSMC manufactures in Taiwan for Apple are sent to <a target="_blank" class="" href="https://www.theatlantic.com/technology/archive/2022/12/tsmc-apple-memory-chip-production-us-china-taiwan-relations/672593/">China</a> or <a target="_blank" class="" href="https://www.cnbc.com/2024/04/10/apple-made-14-billion-worth-of-iphones-in-india-in-shift-from-china.html">India</a> to be incorporated into a product like an iPhone. Therefore, the chip wouldn't be subject to a US tariff but the iPhone would.When deciding whether to build a chip factory in the US, Ezell said several factors — including wage rates, the labor talent pool, and tax policy — would be bigger considerations for companies than the country's tariff policy. But if tariffs proved to be the deciding factor in a company's decision to invest in the US, then Ezell said the policy could arguably be credited with boosting employment in the semiconductor industry."If a company did decide not to launch a factory elsewhere and instead launch it in the United States, then yes, this dynamic could lead companies to hire more," he said.Do you work in the US semiconductor industry? Reach out to this reporter at <a target="_blank" href="mailto:jzinkula@businessinsider.com">jzinkula@businessinsider.com</a>

Trump's trade restrictions could be good for American semiconductor jobs

<ul class="summary-list"><li><a target="_blank" class="" href="https://www.businessinsider.com/tesla">Tesla</a> stands to benefit from any removal of consumer tax credits on electric vehicle purchases.</li><li>The move could hurt competitors more, CEO Elon Musk said.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/elon-musk">Elon Musk</a> supports a Trump plan to end tax credits of up to $7,500 for electric vehicle purchases.That might sound confusing: Why would the CEO of Tesla want to end a program that makes it cheaper for people to buy EVs?Well, according to Musk, it would devastate Tesla's rivals. And Tesla wants to keep its strong lead in the US EV market, which recently slipped under 50% for the first time."I think it would be devastating for our competitors and for Tesla slightly," Musk said in a July earnings call, predicting the impact of the tax credits ending. "But long term probably actually helps Tesla, would be my guess."On Thursday, Reuters reported that Trump plans to end the EV tax credit, with support from Tesla representatives. In a related post on X, Musk called for an "end all government subsidies, including those for EVs, oil and gas."Tesla has had a longer time than some of its rivals to <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-list-government-subsidies-tesla-billions-spacex-solarcity-2021-12">benefit from government subsidies</a>. Its market lead is well established, and it has led an EV pricing war that has squeezed its rivals, making it harder for them to survive if consumer demand falls even further.Put simply: Tesla wins if ending the tax credit pressures smaller rivals enough to stall their growth or even fold.<h2 id="91842e59-2373-4c08-abdd-17185b0bea0d">Tesla sells more EVs than anyone else, and more profitably</h2>In the third quarter of 2024, Tesla <a target="_blank" class="" href="https://digitalassets.tesla.com/tesla-contents/image/upload/IR/TSLA-Q3-2024-Update.pdf">reported</a> a pre-tax profit margin of 18%, well above the industry average of around 9%. Ford, the only competitor to break out its EV-specific finances, <a target="_blank" class="" href="https://s201.q4cdn.com/693218008/files/doc_financials/2024/q3/Press-Release-Ford-2024-Q3-Earnings.pdf">reported</a> a -104% margin for its Model e unit.Yet many of Tesla's vehicles are also priced well below many competitors. The Model 3 starts at $42,490 (after a cheaper option disappeared earlier this year). That's well below the average EV price in the US, which held steady at nearly $57,000 in October, according to Kelley Blue Book data.In an effort to juice sales, <a target="_blank" class="" href="https://www.businessinsider.com/tesla-can-make-cars-cheaper-than-competitors-2024-6">Tesla has drastically cut prices</a> on many of its cars over the past year, instigating an industry-wide price war that has cut into its own margin in pursuit of maintaining its industry-leading market share. Of the nearly 600,000 EVs sold in the US in the first half of 2023, <a target="_blank" class="" href="https://www.coxautoinc.com/wp-content/uploads/2024/07/Q2-2024-Kelley-Blue-Book-Electric-Vehicle-Sales-Report.pdf">half</a> were made by Tesla. Ford, in second place, accounted for just over 7% of EVs sold in the same period."While losing the EV tax credit could also hurt some demand on the margins in the US, this will enable Tesla to further fend off competition from Detroit as pricing/scale/scope is an apples to oranges when compared to the rest of the auto industry once the EV tax credit disappears," Dan Ives, a longtime bullish analyst at Wedbush, told clients in a note on Thursday.<h2 id="c6cefac7-9186-47f8-8f0a-f2fb65808785">Tesla is ahead of the curve in building a US manufacturing presence</h2>Eliminating the <a target="_blank" class="" href="https://www.businessinsider.com/federal-state-electric-car-vehicle-tax-credits-rebates-qualify">consumer tax credit</a>, part of President Joe Biden's Inflation Reduction Act, would need congressional approval. It's not yet clear if Trump and the incoming Republican-controlled Congress would also target other IRA tax incentives, like those supporting domestic manufacturing of cars, batteries, and other components. Competitors like BMW, Honda, and Hyundai have <a target="_blank" href="https://techcrunch.com/2024/07/20/tracking-the-ev-battery-factory-construction-boom-across-north-america/">raced</a> to scale up factories state-side to take advantage of those credits.Tesla has been ahead of this curve in manufacturing, too, with six US factories churning out cars and batteries. That work has paid off, and many Tesla models are regularly named as the most "<a target="_blank" href="https://www.cars.com/american-made-index/">American-made</a>" compared to competitors, many of which rely on factories in Mexico. In fact, only one other American automaker even cracked the top 10 in 2024.Tesla CFO Vaibhav Taneja said in a July earnings call that the company has taken advantage of manufacturing credits, but "we always drive ourselves to say, OK, what if there is no IRA benefit? And how do we operate in that kind of an environment? Like Elon said, we definitely have a big advantage as compared to our competition on that front."In October, the Alliance for Automotive Innovation, an industry group representing Ford, GM, Honda, Toyota, and others, <a target="_blank" href="https://subscriber.politicopro.com/article/2024/11/auto-trade-group-to-gop-tax-writers-keep-bidens-ev-credits-00189430">urged</a> Congress to keep the tax credits.The tax credits, including those for commercial leasing and manufacturing, are "critical to cementing the US as a global leader in the future of automotive technology and manufacturing," they said in an October letter to Congress published by <a target="_blank" href="https://subscriber.politicopro.com/f/?id=00000193-277d-dea7-afbb-b77f708f0000">Politico</a>.The group, which does not include Tesla, did not respond to a request for comment. A spokesperson for the Trump transition team did not respond to a request for comment.While Musk supports cutting the EV tax credit, reports of its potential demise appear to have spooked investors. Tesla shares fell about 5% following the Reuters report, while Rivian shares fell 11%.Musk and other Tesla leaders have long said autonomous vehicles are the future of Tesla, not just EVs, and encouraged potential investors to think much more long-term.Additional reporting by Benjamin Zhang.

Why Musk supports Trump getting rid of EV tax credits

<ul class="summary-list"><li>Trump said he plans to change the Affordable Care Act, which provides healthcare for 45 million Americans.</li><li>His past actions include ACA opposition. He has flip-flopped on Medicaid and Medicare cuts.</li></ul>Donald Trump's return to the Oval Office could mean changes to Americans' healthcare coverage, based on his previous comments and actions while president.During his recent campaign, Trump promised to <a target="_blank" class="" href="https://www.businessinsider.com/what-us-economy-would-look-like-with-trump-biden-presidency-2024-5">make changes to the Affordable Care Act</a>, colloquially called Obamacare, but did not give specifics."If we can come up with a plan that's going to cost our people, our population less money and be better healthcare than Obamacare, then I would absolutely do it," Trump said at the presidential debate in September.As president, he will also have the power to influence America's healthcare landscape, including insurance coverage, drug price negotiations, government <a target="_blank" class="" href="https://www.businessinsider.com/fluoride-in-water-why-it-is-controversial-risks-benefits-2024-11">health and safety regulations</a>, and reproductive healthcare access.Trump has a <a target="_blank" class="" href="https://www.businessinsider.com/healthcare-investors-torn-on-trump-second-term-2024-11">mixed record</a> on supporting government health insurance policies like the ACA, which the Department of Health and Human Services estimated covers 45 million people in health plans like <a target="_blank" class="" href="https://www.businessinsider.com/medicare-changes-increase-costs-deductibles-prescription-drugs-premiums-copays-2024-10">Medicare</a> and Medicaid. Also in the hot seat: the enhanced federal ACA subsidies, which are <a target="_blank" class="" href="https://www.cbsnews.com/news/trump-aca-subsidies-health-insurance-affordable-care-act-congress/">set to expire</a> at the end of next year.If Trump doesn't extend the enhanced subsidies policy, which helps many low- and middle-income Americans pay for medical care, the Congressional Budget Office estimated that <a target="_blank" href="https://www.cbo.gov/system/files/2024-07/60523-2024-07-premium-tax-credit.pdf">nearly 4 million people </a>will lose their coverage in 2026 because they won't be able to afford it.Trump's transition team told Business Insider in a statement that he will "strongly protect" Medicare in his second term — although he has <a target="_blank" class="" href="https://www.businessinsider.com/trump-cutting-medicare-social-security-benefits-2024-3">previously suggested cuts</a>. Any changes to Medicaid and Medicare under Trump could also cause those with ACA insurance see a reduction in their care options.<h2 id="69e6831b-4c89-4dd9-8ec0-501ab8666185">Medicare, Medicaid, and preexisting conditions</h2>Trump has not provided specifics about his affordable healthcare policies, beyond saying he has "concepts of a plan" at the September debate.During his first term, Trump backed a rejected Supreme Court case to overturn the Affordable Care Act, which former President Barack Obama passed in 2010 and that expanded Medicaid coverage for low-income Americans and Medicare coverage for older Americans. ACA's other marquee change required insurance companies to cover care for individuals with preexisting conditions, like asthma, heart disease, and diabetes.Yunan Ji is an assistant professor and economist at Georgetown University with an expertise in healthcare policy. She told BI that reducing or repealing ACA coverage — which Trump proposed during his first-term — could be detrimental to Americans with preexisting conditions, who may lose their coverage or have to pay more for healthcare."We purchase insurance to protect against future risk," Ji said. "If we make people go into a different risk pool when they require care for some medical condition, that defeats the purpose of insurance."Trump has also voiced support for privatizing more of the healthcare sector. This could mean some Americans on ACA plans could face higher out-of-pocket costs and fewer in-network care options.President Joe Biden's <a target="_blank" class="" href="https://www.businessinsider.com/house-passes-inflation-reduction-act-sending-it-to-biden-2022-8">Inflation Reduction Act</a> also took steps to lower the cost of prescription drugs and cap out-of-pocket costs for Medicare beneficiaries. The legislation <a target="_blank" href="https://www.axios.com/2024/02/07/trump-medicare-price-negotiations-executive-power">requires</a> Trump to continue existing drug price negotiations through at least the end of 2025.<h2 id="1380ef19-42c4-43c1-841e-04dcb5227dd9">Reproductive and gender-affirming care</h2>Trump has said he would take steps to <a target="_blank" href="https://www.nbcnews.com/politics/2024-election/trump-vows-stop-gender-affirming-care-minors-re-elected-president-rcna68461">ban all gender-affirming healthcare and hormone therapies</a> for minors, which ACA plans cover in some states.<a target="_blank" href="https://www.businessinsider.com/what-is-project-2025-conservative-political-playbook-heritage-foundation-trump-2024-7">Project 2025</a>, a policy plan proposed by Trump allies, calls for significant national restrictions on abortion and birth control. Trump has expressed support for federal enforcement of the Hyde Amendment, a rule that prevents Medicaid from covering abortion pills and procedures. Among the <a target="_blank" class="" href="https://www.kff.org/womens-health-policy/dashboard/abortion-in-the-u-s-dashboard/">37 states and DC</a> that do not ban abortion, <a target="_blank" href="https://www.kff.org/medicaid/state-indicator/abortion-under-medicaid/?currentTimeframe=0&amp;sortModel=%7B%22colId%22:%22Follows%20Federal%20Standard,%20Funding%20Only%20Cases%20Involving%20Life%20Endangerment,%20Rape%20and%20Incest%22,%22sort%22:%22desc%22%7D">17 states and DC</a> currently follow the Hyde Amendment.Trump has called for federally-subsidized in-vitro fertilization — a proposal that is divisive among Republicans.<h2 id="f6dc24d6-1b01-41c0-99ba-9603db98ef3f">Insurance regulations and national health policy</h2>Ji said that Americans often focus on the sticker price of premiums in their healthcare plan — how much they are expected to pay out-of-pocket each month or year. But a Trump presidency would also shape rules and regulations for insurance companies. For example, companies are required to cover a wide range of providers, so someone with heart disease can find an in-network cardiologist in their area.Ji added that Trump's cabinet appointments will give insight into his second-term healthcare priorities. His leadership selections will determine federal investment in medical research, health and safety guidelines, insurance company regulations, and vaccines. Trump is expected to <a target="_blank" href="https://www.nbcnews.com/politics/2024-election/trump-banning-vaccines-president-rfk-fluoride-rcna178570">discourage vaccinations</a> and limit federal health and insurance regulations.Trump tapped <a target="_blank" class="" href="https://www.businessinsider.com/trump-robert-f-kennedy-jr-rfk-department-health-human-services-2024-11">Robert F. Kennedy Jr.</a> on November 14 to lead the Department of Health and Human Services, a decision that will require Senate approval. Kennedy has not outlined specific plans to increase healthcare affordability, but he would have some influence over the ACA in the role. The former presidential candidate is a vaccine-skeptic, who Trump hopes will "<a target="_blank" class="" href="https://www.businessinsider.com/how-rfk-jr-plans-to-make-america-healthy-again-2024-11">go wild</a>" on health, safety, and food protocols.Any major changes to healthcare policy and federal budgets would need to be approved by Congress. Trump will likely have the support of a Republican-led Senate and House."The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail," Karoline Leavitt, a spokesperson for the Trump-Vance transition team, told BI in a statement. "He will deliver."Are you doing anything to prepare your finances or healthcare plan for Trump's second term? If so, please reach out to this reporter at <a target="_blank" class="" href="mailto:allisonkelly@businessinsider.com">allisonkelly@businessinsider.com</a>.

Trump's plans to change healthcare could slash insurance for some low-income Americans and retirees

<ul class="summary-list"><li>Hungary's PM Viktor Orbán said the US will abandon its support for Ukraine, days after Trump's win.</li><li>He said that the US "will quit" the war and there's a "military defeat in Ukraine," per reports.</li></ul>Hungary's leader, Viktor Orbán, has a chilling forecast: the US will abandon Ukraine under President-elect Donald Trump."The Americans will quit this war," he told national radio, per multiple outlets, including <a target="_blank" class="" href="https://www.reuters.com/world/europe/hungarys-pm-orban-says-trump-will-quit-ukraine-war-forcing-eu-rethink-2024-11-08/">Reuters</a>. "There is military defeat in Ukraine."Orbán is Russian President Vladimir Putin's closest ally in the European Union, a position that has put him <a target="_blank" rel="" class="" href="https://www.businessinsider.com/hungary-prime-minister-viktor-orban-shunned-europeanu-union-russia-putin-2024-7">out of favor</a> in the bloc.Trump and Orbán have long shown mutual admiration.In the past, Trump called Orbán his "friend" and lauded him for his knowledge of world affairs. And during his debate with Vice President Kamala Harris in September, Trump <a target="_blank" href="https://abcnews.go.com/Politics/harris-trump-presidential-debate-transcript/story?id=113560542">described</a> Orbán as one of the world's "most respected men" — a "strong man" and "a tough person."The Hungarian prime minister's prediction came after Trump secured a return to the White House, and follows reports that Trump's advisors are laying out different plans on how to end the war in Ukraine.One plan includes establishing an 800-mile demilitarized zone and having Ukraine pledge not to join NATO for at least 20 years, The Wall Street Journal <a target="_blank" class="" href="https://www.businessinsider.com/trump-advisors-peace-plans-ukraine-demilitarized-zone-no-aid-russia-2024-11">reported</a> Wednesday, citing three people close to Trump.Keith Kellogg and Fred Fleitz, two top officials who served on the National Security Council under Trump's first administration, presented another plan to Trump earlier this year that involved withholding weapons from Ukraine until the country agreed to engage in peace talks with Russia, <a target="_blank" rel=" nofollow" class="" href="https://www.reuters.com/world/us/trump-reviews-plan-halt-us-military-aid-ukraine-unless-it-negotiates-peace-with-2024-06-25/">Reuters</a> reported at the time.Trump hasn't approved a specific plan as yet, those close to him told the Journal.Orbán's forecast comes as world leaders hold key meetings this week, in part to discuss the war in Ukraine.At a <a target="_blank" class="" href="https://x.com/i/broadcasts/1YqKDkLMnjkxV">press conference</a> held at the European Political Community in Budapest on Thursday, Orbán also urged Europe to define the terms of a Ukrainian victory, saying he hoped this "intellectual" work would be done by Friday night.European leaders are convening at a European Council summit in Budapest on Friday, where they are <a target="_blank" class="" href="https://www.consilium.europa.eu/en/meetings/european-council/2024/11/07-08/?utm_source=x.com&amp;utm_medium=social&amp;utm_campaign=20241107-informal-euco-announcer&amp;utm_content=visual-card">expected</a> to discuss security and geopolitics in Ukraine.Meanwhile, in an interview with <a target="_blank" class="" href="https://www.businessinsider.com/hungary-next-months-ukraine-war-far-more-brutal-russia-china-2024-7">Axel Springer</a> media outlets earlier this year, Orbán said he was holding meetings with world leaders as part of a "peace mission" tour to create a "limited-time" cease-fire to speed up peace talks between Russia and Ukraine.Orbán was among the first European leaders to <a target="_blank" class="" href="https://x.com/PM_ViktorOrban/status/1854062809304154172">congratulate</a> Trump on his victory.Ukrainian President Volodymyr Zelenskyy also quickly congratulated Trump, <a target="_blank" class="" href="https://x.com/ZelenskyyUa/status/1854289413246705695">saying</a> that strong and unwavering US leadership is vital for the world and for a just peace.

A pro-Trump European leader predicts he will abandon Ukraine: 'The Americans will quit this war'

<ul class="summary-list"><li>Americans living abroad shouldn't owe taxes on the same income in two countries, Donald Trump said.</li><li>"I support ending the double taxation of overseas Americans," he told The Wall Street Journal.</li></ul>Americans living abroad shouldn't be taxed twice on the same income by two different countries, <a target="_blank" class="" href="https://www.businessinsider.com/donald-trump">Donald Trump</a> said."I support ending the double taxation of overseas Americans," the former president<a target="_blank" class="" href="https://www.wsj.com/politics/policy/donald-trump-tax-plan-americans-abroad-a74bfbdd"> told The Wall Street Journal</a> in a statement.The Republican presidential candidate appeared to endorse residence-based taxation over citizenship-based taxation. The US lays claim to its citizens' global income even if they <a target="_blank" class="" href="https://www.businessinsider.com/digital-nomad-visa-tax-rules-for-traveling-working-remotely-internationally-2023-1">live and work in another country</a>, whereas most developed countries tax income depending on where it's earned.The unusual policy dates back to the 1860s, when lawmakers introduced it to fund the Civil War.Trump has dangled a variety of tax changes to drum up votes as he vies to secure a second term in office by winning the November 5 election. He's<a target="_blank" class="" href="https://www.businessinsider.com/tax-tips-overtime-trump-proposals-income-money-election-2024-10"> suggested</a> eliminating taxes on tips, overtime pay, and Social Security benefits. He already plans to <a target="_blank" class="" href="https://www.businessinsider.com/trump-tax-plan-tarriffs-benefits-top-earners-study-2024-10">extend</a> his 2017 tax cuts, many of which are set to expire in 2025.US tax policy is an annoyance for many Americans living overseas, who can wind up owing US taxes in addition to those they pay in their country of residence. It's worth noting people don't owe anything to the IRS on the first $126,500 they earn abroad, and can receive tax credits for some payments they make overseas. They also have the option of <a target="_blank" class="" href="https://www.businessinsider.com/how-to-renounce-us-citizenship-2018-8">renouncing their citizenship</a>.A shift to taxing Americans based on where they live could spur some <a target="_blank" class="" href="https://www.businessinsider.com/us-millionaires-going-abroad-look-for-american-dream-report-2023-2">wealthy citizens to move</a> to low-tax countries — similar to British and other European expats relocating to places like Dubai or Monaco.Tax policy has become a key talking point in the presidential race, with Vice President Kamala Harris, Trump's Democratic rival, <a target="_blank" class="" href="https://www.businessinsider.com/what-you-need-to-know-about-kamala-harris-opportunity-economy-2024-9">promising tax credits</a> for new parents and first-time home buyers.There were about 4.4 million US citizens living overseas in 2022, and about 2.8 million of those were eligible to vote, according to the latest figures from the Federal Voting Assistance Program."Fellow Americans living abroad, your vote is more important than ever," Trump told the Journal.

Americans living overseas face being taxed twice. Donald Trump wants to change that.

<ul class="summary-list"><li>Presidential hopeful Donald Trump has proposed getting rid of taxes on tips and overtime.</li><li>Trump said he intends for those proposals to help low earners and incentivize work.</li></ul>If former President Donald Trump gets his way, workers who collect <a target="_blank" class="" href="https://www.businessinsider.com/you-might-be-eligible-for-overtime-pay-2023-8">overtime pay</a> or <a target="_blank" class="" href="https://www.businessinsider.com/drivers-and-servers-share-how-they-earn-extra-money">tips</a> could stop paying taxes on them.During remarks in Arizona earlier in September, he <a target="_blank" class="" href="https://www.cbsnews.com/news/trump-unveils-new-no-tax-on-overtime-pay-policy-in-arizona-remarks/">said</a> that ditching taxes on overtime would give "people more of an incentive to work."The current system treats overtime and tips just like any other income; they're taxed as part of a worker's normal wages. But if Trump's proposal goes into place, it could save hospitality workers a significant amount each year.There were around 4 million workers in tipped occupations in 2023, according to an analysis from <a target="_blank" class="" href="https://budgetlab.yale.edu/news/240624/no-tax-tips-act-background-tipped-workers">The Budget Lab at Yale</a>. And while part of the group had incomes low enough that they paid no income tax, there's a pool of more than 2 million workers that stand to benefit.It's a policy that has broad appeal: an Ipsos <a target="_blank" class="" href="https://www.ipsos.com/en-us/proposed-policy-end-federal-income-tax-tips-has-bipartisan-support">poll</a> from August found that the majority of Americans support ending federal taxes on tips. It's also a rare topic Trump and Kamala Harris can agree on. In mid-August, the vice president and Oval Office hopeful <a target="_blank" class="" href="https://www.businessinsider.com/harris-agrees-trump-tips-service-workers-not-taxed-2024-8">jumped on board</a> with her own proposal for making some tips tax-exempt.Millions more workers — specifically those paid hourly, as well as salaried workers who make under about $44,000 a year — are eligible for overtime, typically receiving 150% of their usual pay for going over 40 hours a week.These measures, if enacted, could fundamentally alter the structure of income across America, especially since both employees and companies are expected to quickly optimize their tax strategies.<h2 id="925f2f99-c64e-4f6e-aec9-6923725b85e3">Tax-strategy adjustments</h2>The first question is when exactly the new changes would go into place. For starters, Trump has to win the election, something that's currently a coin flip, according to <a target="_blank" class="" href="https://projects.fivethirtyeight.com/polls/president-general/2024/national/">polling averages</a> that have Trump and Harris roughly tied in battleground states.If Trump does emerge victorious, implementing these changes would require congressional approval. Given that the former president's 2017 tax laws are set to expire in 2025, lawmakers may seize the opportunity to include these proposals in a new set of laws.As soon as that law is signed, it's likely that employees would quickly look for ways to navigate and optimize the new system in an attempt to lower their tax burdens.Employers would be no different, and shifts to current pay structures should be expected. Heidi Shierholz, senior economist at EPI Action — a left-leaning nonpartisan organization advocating for economic justice — told Business Insider that businesses could pay their workers slightly less to allow employees to have the financial benefit of not having their overtime pay or tips taxed."Their employer can pay less to keep them but the worker is not worse off because now they don't have to pay taxes on that," Shierholz said.It could also result in service-industry businesses further shifting the burden of paying workers a living wage onto customers, and reducing the amount of tax paid into <a target="_blank" class="" href="https://www.businessinsider.com/when-will-social-security-benefits-run-out-retirement-crisis-boomers-2024-5">Social Security</a>.Multiple other experts told BI that such tax-optimization tactics would also be used by both workers and employers outside the service industry.It could mean, for example, that some businesses claim that the fees they charge are actually tips. Or it could mean some salaried workers switch to hourly wages in order to qualify for a higher rate of untaxed overtime pay.Joe Hughes, a senior analyst on federal tax policy at the Institute on Taxation and Economic Policy, told BI that "you would need a lot of safeguards in place to keep this from being just another avenue for tax avoidance."He continued: "It's at least applaudable that Trump says that he wants to help low-income workers. But I think that there are much better avenues to do that than exempting very specific types of income."Alex Muresianu, a senior policy analyst at the Tax Foundation, told BI that a tip has a specific definition: it has to be a voluntary payment given to a worker by a customer that has not been negotiated beforehand. In an extreme case, Muresianu said, some workers could stretch that."Introducing that as the norm in response to the policy would effectively shift some compensation that is normally small business income or something into tax-exempt tips," he said.Hughes said that workers could take a similar approach with the overtime proposal — they might choose to reclassify themselves as wage earners instead of salaried earners so they could earn tax-exempt overtime pay."A lot of lawyers are working 60, 70 hours a week, right? So why not reclassify yourself as a wage employee, then you get to take advantage of overtime rules and not pay taxes on it," he said.Shierholz said that the US already has a complicated tax code, and there are more efficient ways to better help low-income workers, like increasing overtime pay and raising the minimum wage so workers do not have to rely on tips from customers to stay afloat."A problem through this absolutely Rube Goldberg approach is that it has all of these unintended distortionary consequences that you could just address directly," she said.The Trump campaign did not respond to a request for comment on the potential for the tax proposals to lead to avoidance. But Karoline Leavitt, the Trump campaign's national press secretary, told BI that "Trump proudly passed the largest tax cuts for hardworking Americans in history.""When President Trump is back in the White House, he will make the Trump tax cuts permanent and end taxes on tips for service workers, end taxes on overtime pay, and end tax on Social Security," she added.Do you collect tips or overtime pay? What are your thoughts on eliminating taxes on tips and overtime? Share your story with this reporter at <a target="_blank" href="mailto:asheffey@businessinsider.com">asheffey@businessinsider.com</a>.

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