Siemens CEO defends praising Trump, says there's 'nothing wrong' with US tax overhaul

  • Speaking on the sidelines of the Munich Security Conference, Siemens CEO Joe Kaeser told CNBC he believed the U.S. tax policy changes would be a "net positive" for job creation.
  • "That's why I've been congratulating the American president for his tax reform. I didn't congratulate him for his first year in office or anything else but that I believe was a job well done," Kaeser said.
  • Critics of the tax changes argue it will add an extra $1.5 trillion to the U.S. deficit and will further widen the wealth gap between rich and poor.

President Donald Trump deserved to be congratulated for the recent changes to the U.S. tax system, according to the chief executive of Europe's largest industrial company.

Speaking on the sidelines of the Munich Security Conference, Siemens CEO Joe Kaeser told CNBC he believed the U.S. tax policy changes would be a "net positive" for job creation. He also defended his move to compliment Trump on his tax overhaul during a dinner held at the World Economic Forum in Davos last month.

"There is a very, very good chance that a lot of jobs are being created because the companies have more money to spend on innovation and growth," he said Thursday.

"That's why I've been congratulating the American president for his tax reform. I didn't congratulate him for his first year in office or anything else but that I believe was a job well done," Kaeser said.

An overhaul of the U.S. tax system was approved late last year and has been broadly viewed as a legislative victory for Trump. The changes saw the corporate tax rate fall to 21 percent from 35 percent and are predicted to lift consumer spending and U.S. growth.

'Could it make rich people richer? Yes, maybe'

CEO Joe Kaeser gestures during the annual results press conference on November 9, 2017 in Munich, Germany.
TF-Images | TF-Images via Getty Images
CEO Joe Kaeser gestures during the annual results press conference on November 9, 2017 in Munich, Germany.

The International Monetary Fund (IMF) upwardly revised its global growth forecasts for 2018 and 2019 last month, saying the amendments were partly down to the recently approved overhaul of the U.S. tax system.

However, critics of the changes argue it will add an extra $1.5 trillion to the U.S. deficit and will further widen the wealth gap between rich and poor.

"There's nothing wrong with it because more jobs means better conditions for the ones who are not that rich. Could it also make rich people richer? Yes, maybe … But I think the key focus ought to be creating jobs," he added.

Siemens, which has around 65,000 staff based in the U.S., has projected a tax rate at the lower end of the forecast range of 27 to 33 percent for fiscal 2018.

The German engineering group reported a 14 percent decline in quarterly industrial profit during the final three months of 2017 last month. It cited ongoing weak demand from the power and gas sector.