After the Border Adjustment Tax got its long-anticipated hearing in the House, it seemingly has lost almost all of its initial momentum. Leading up to the hearing, the retail industry has been up in arms over the topic. According to Bloomberg, the White House itself has been leaning away from the idea, and Senate Majority Leader Mitch McConnell recently claimed the provision’s chances were “rather bleak.”
In the House hearing on Tuesday, chief executive officers of retailer Target Corp and agribusiness Archer Daniels Midland Co. Target CEO Brian Cornell opposed the border tax, while ADM CEO Juan Luciano favored the proposal (Reuters). As the tax would create a tax on imports accompanied by a credit for exports, Target, a company that imports a lot, would be hit hard.
Retailers and small businesses would likely be impacted the most by such a tax because they rely heavily on imports. Advocates of the tax claim it would lead to a strong era of growth, better middle class jobs, and a boom in manufacturing.
Today, the National Retail Federation flew in 20 executives from both large and small businesses to Washington to lobby against the controversial border adjustment tax (Politico). The companies, including well-known names like Dillard’s, IKEA, and Levi Strauss will meet with dozens of Hill lawmakers in addition to Commerce Secretary Wilbur Ross, Treasury Secretary Steve Mnuchin, and Labor Secretary Alexander Acosta.
Republicans are also divided on the matter, and it seems as though the Border Adjustment Tax proposal is struggling to survive. To stay up to date on the future of the border tax and other international trade issues, follow Mercatura Global on Twitter.