Tariff on Outsourcing: Trouble Ahead for IT Workers?

While US President Donald Trump’s tariff on goods is creating sufficient trouble to various countries, his advisor and tariff advocate Peter Navarro shifted his focus and suggested that tariff should be extended to services rendered by remote workers and outsourcing too. Trump’s advisor and tariff advocate Peter Navarro reposted a call for tariffs on remote workers outsourcing on social media platform X.

On Sept. 1, the post was originally made by right-wing activist and former US Navy intelligence officer Jack Posobiec. He argued that: “Countries must pay for the privilege of providing services remotely to the US the same way as goods. Apply across industries, leveled as necessary per country.”

US is a major player in the IT outsourcing market, generating the highest revenue. Though it is unclear whether IT services will actually be taken under the tariff regime, many online are demanding the same. The tech workers are happy that tariffs might target the Indian IT sector. They also called for incentives to strengthen US labour.

Flagging US data, one of the netizens, said that for the first time there are more unemployed Americans than job postings. “We need to prioritize Americans for these positions. We need to tariff outsourcing to other countries. Let’s take America back.”

The idea of possible tariffs on outsourcing brought cheer among American tech workers, and it was evident on the r/AmericanTechWorkers subreddit. Sharing the news, one of the users said: “This will really help us out if it’s true.” One other person remarked: “Offshoring is a far bigger threat than H-1B visas. The corporations can bypass our labor laws and just hire people straight from another country remotely. All while telling us we need to RTO or quit.”

However, the International Chamber of Commerce noted that applying tariffs to services would not just be impractical, but it would also lead to legal, operational, and economic risks.

Bringing the services under the tariff rule is really tough. “There is no clear moment when a service ‘enters’ a country, no global classification system comparable to the Harmonized System for goods, and no consistent method to assess what should be taxed,” the ICC added.