On Geopolitics

How Tax Reform Will Net the U.S. Big Returns

Mark Fleming-Williams
Senior Analyst, Global Economy
Mar 20, 2018 | 09:00 GMT
A picture of U.S. President Donald Trump in the Oval Office on Dec. 22, 2017, moments before signing tax reform legislation into law.

U.S. President Donald Trump talks with journalists before signing tax reform legislation into law in the Oval Office, Dec. 22. The changes will help America prosper in a changing global economy.

(CHIP SOMODEVILLA/Getty Images)

In December 2017, U.S. President Donald Trump signed into law his country's first major tax reform since the Reagan era. Sometimes new legislation is seismic in its effects, directly altering the playing field on which the citizens of the country operate. At other times, a new law can serve as a useful signpost for greater changes that are already underway. In this case, the tax reform represents a bit of both: It will have important ramifications itself, and it will form part of wider trends that are occurring over decades. From a geopolitical perspective, the move will have three main effects: It will lead to a repatriation of sizable amounts of cash by U.S. corporations, provide a stimulus for the domestic economy and increase the country's debt. The combined dynamics of these effects will play a key role in shaping the outlook for the U.S. economy – and its place...

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