Several key international trade issues made the headlines in various news media outlets this week, namely the proposed border adjustment tax and the status of both the TPP and the NAFTA. Here are the key take-aways:
- It has been reported in the media this week that House Republicans may push ahead with tax reform legislation that will include a border adjustment tax even though it is not clear whether they have enough votes to pass the bill. However, a couple of days ago, in an interview with The Wall Street Journal, Trump stated that he is not a fan of the GOP’s border adjustment proposal that would tax imports and exempt exports as it was too complicated. In that interview, he stated that he didn’t believe that a border adjustment was needed in addition to lowering the corporate tax rate, and that it was too complicated because companies would receive credit on certain parts and not others and would have to contend with country of origin issues. Therefore, one can only continue to speculate on the likelihood of that a border adjustment tax will come to pass and what it will specifically entail.
- Sean Spicer, Spokesman for the Trump Transition Team, announced that executive orders on the Trans-Pacific Partnership Agreement (TPP) and the North American Free Trade Agreement (NAFTA) will be issued shortly upon President-Elect Trump’s taking office, and that Trump will not wait for trade-related administration nominees to be confirmed by the Senate. During the presidential campaign, President-Elect Trump stated that he intended to withdraw from the TPP and either renegotiate the NAFTA or withdraw from it as well.