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

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

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

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

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

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

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is supported by many congressional republicans Reagan (1984 Trade & Tarriff act) Reagan/Mulroney 1988 C/US FTA (NAFTA superseded this, it did not replace it) NAFTA was negotiated by Bush/ratified by Clinton

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

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%

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

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

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:

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

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

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