1. What have we learned from two weeks with Trump
9/2/2017
Chris Jacobs
Managing Partner - Opportunity Northwest

2. Trump: Who is he? Real Estate “tycoon” Dealmaker “In your face” Smart
Media manipulator extraordinaire

3. Trump: What his actions reveal
Decisive
Not particularly “Free-trade” for a republican
Pro-privatization
PR savvy – at least with his base
Is a win/lose negotiator
Treats government like a business

4. Issues for cross-border businesses
NAFTA?
Border-Adjustment Tax?
Travel Restrictions?

5. NAFTA What exactly is it? Can Trump really withdraw? Re-negotiation
Negotiation tactics using TPP

6. Importance of NAFTA Canada #1 Trade partner $881B
$2B/day flow across US/Canada border
Canada is top trade partner for 35 states
9mm U.S. jobs depend on investment and trade with Canada
In terms of export dollars, Canada (#1) and Mexico (#2) total more than the next 10 put together

7. NAFTA Withdrawal: Unlikely
Free Trade is supported by many congressional republicans
Reagan (1984 Trade & Tarriff act)
Reagan/Mulroney 1988 C/US FTA (NAFTA superseded this, it did not replace it)
NAFTA was negotiated by Bush/ratified by Clinton

8. But… What If? Academics and legal scholars are still uncertain
Likely back to C/US FTA bi-lateral trade agreement
In the unlikely event that congress agrees with removing that Reagan legacy…
Most likely WTO “Most Favored Nation” status kicks in

9. Border Adjustment Tax Similar to VAT
Companies wouldn’t be able to deduct the cost of imports from their revenue.
Exports would be made tax-free
Accompanied by a corporate tax rate reduction from 35% to 20%

10. Bold Predictions Softwood Dairy, poultry and eggs Pharmaceutical
Alcohol
Energy
Data storage & Telecom
Rules of origin
Dispute resolution

11. Effect on small businesses
Pro:
Opportunity for fast acting Canadian businesses
Protectionist policies aimed elsewhere may create opportunities
Show a “win” for US if business is a US entity
Immigration reforms may increase skilled labor pool in Canada
Con:
US will push for equity on duty free allowance and small parcel shipping
Canadian and Mexican borders may be treated the same
Blanket protectionist policies may impact Canadian business

12. Watch outs Increasingly important to “do it correctly”
Correct entity formation
Know tax laws and how to avoid creating tax nexus
Create a proper paper trail for cross-border shipments
Track immigration law changes
Understand all financial impacts
Make sure you are ready for the stresses associated with international growth
Don’t be afraid of experienced service providers:

13. Summary We’ve seen that there’s still uncertainty
We believe that there will be opportunity
We know it will get:
a bit more difficult to do cross border business
a bit more detail oriented (paperwork and regulations)
We also know that it is still worth the effort

14. Chris Jacobs Managing Partner Opportunity Northwest (360) 398-3987
Thank you
Chris Jacobs Managing Partner Opportunity Northwest (360)

15. The Trump Process What we have is bad I’ll fix it
Negotiate from the point that it’s a lost cause for “opponent”
You don’t want to be my enemy, if I’m your friend, can I get a better deal?
Settle and bring in the press
Announce how he made a great deal