American corporations dramatically increased the amount of offshore profit they brought back to the U.S. last year, but not nearly as much as President Donald Trump predicted as part of a trillion-dollar tax cut in late 2017.
Companies brought back $85.9 billion in the fourth quarter and $664.9 billion for full year 2018, according to quarterly data released by the Commerce Department on Wednesday. Trump had pledged that companies would bring back $4 trillion, spurring U.S. job and investment growth.
In 2017, companies brought back a total of $155.1 billion in offshore cash, the Commerce Department said.
The tax cuts on corporate profits earned offshore — from 35 percent to a one-time rate of 15.5 percent on cash and 8 percent on other assets — encouraged companies to bring it home. Tech giants like Apple kept huge stashes of cash abroad, analysts said. Apple said last year it would bring back nearly all of its $250 billion parked overseas.
Much of the money brought home went to a stock buybacks, according to a Federal Reserve study last year. Buyback activity hit a record $1.1 trillion last year and could surpass that level this year.
Some have estimated that American companies held between $1 trillion and $2.5 trillion in cash offshore before the tax cuts.