Ownership-Based Tariffs: A New Framework for U.S. Trade and Industrial Revival

Abstract

The persistent U.S. trade deficit and decline in domestic manufacturing underscore the limitations of conventional tariff frameworks. Traditional tariffs—based on the country of origin—have proven increasingly ineffective in a globalized economy where multinationals exploit jurisdictional arbitrage and complex supply chains. This white paper introduces a novel and unprecedented approach to trade policy: ownership-based tariffs. Instead of targeting goods by geographic origin, this framework proposes tariffs based on the ownership structure of the producer, levying tariffs on goods made by foreign-owned companies regardless of production location, while incentivizing ownership localization and domestic production.

By focusing on the capital beneficiary of trade rather than its logistical route, this proposal aims to realign U.S. trade policy with national economic interests, foster domestic industrial growth, and reduce capital leakage. The paper outlines the mechanisms for defining foreign versus domestic ownership, the legal considerations for implementation, and the coordination needed with existing industrial policies like the CHIPS and Science Act. It also anticipates global reactions, WTO compatibility, and potential economic spillovers.

This framework represents a paradigm shift in how national economies can assert strategic economic sovereignty—without protectionism, but by promoting deeper alignment between capital investment and domestic prosperity. If adopted, ownership-based tariffs could reshape global trade incentives, usher in a new industrial era for the United States, and serve as a replicable model for other economies.

Keywords: Trade Policy, Industrial Strategy, Ownership-Based Tariffs, Globalization, Economic Sovereignty, Foreign Direct Investment (FDI), U.S. Manufacturing, Trade Imbalance, Tariff Reform, Economic Security