BlackRock's Fink Isn't Lending His Support To Trump's Plan To Repatriate Trillions Of Dollars

The Wall Street Journal reported in November 2016 that American companies are holding as much as $2.5 trillion in cash abroad, and Trump's proposal of a one-time 10 percent tax could prove to be the catalyst that will bring a lot of the cash back home.

A Word Of Caution

While this may sound appealing to many, BlackRock, Inc. BLK Chairman and CEO Laurence "Larry" Fink cautioned investors that the repatriation of overseas cash won't yield the benefits many are hoping for.

Speaking as a guest on CNBC's "Squawk Box" segment on Friday, Fink said he has never believed repatriating cash will be re-invested in the U.S. economy through the creation of new factories and increased production. Image Credit: By Wilson Center - Wilson Center, CC BY-SA 3.0, via Wikimedia Commons

Fink expounded upon the idea, saying companies had little excuse in the past not to invest in their business as needed given the availability of record low interest rates. As such, he expects much of the repatriated cash will be returned to investors through dividends, share buyback programs or even for M&A purposes.

Finally, Fink stated that he is now writing his annual letter to CEOs of S&P 500 companies, and one of the components of the letter will focus on this topic. Specifically, he will be asking business leaders what they plan on doing if they repatriate cash in the future.

"That's one of the big issues we want to know as a large investor," he concluded.