LOS ANGELES—The new border-adjustment tax plan is meant to tax imports and subsidize exports with a goal of encouraging US companies to reshore and bring jobs back to the US. At the annual Pulse of the Ports conference, Mario O. Moreno, senior economist at IHS Maritime and Trade, said that many trade partners may see the move as a protectionist measure, and may be met with hostility. The bill still needs to go through Congress, and is unlikely to pass.
The bill's goal is to bring jobs back to the US by encouraging companies to reshore operations, however, there is no evidence that the move will encourage companies to move home. “The benefit of these measures is that American corporations will return to the US and will generate more jobs,” Moreno said in his speech. “However, there is no consensus as to the impact on the labor market, and there is concern that the number of jobs will not be significant.”
In addition to not brining jobs back to the US, the bill may also impact imports with other countries retaliating by imposing their own tax on imports. “This move may be perceived as protectionist measure by many of our trading partners. As a result, they may impose retaliatory tariffs or taxes for many of our exports” said Moreno. “Certainly, many of our retailers will be dramatically affected by these changes in our taxation, and they are heavily opposed to it.”
As a result of the challenges with this bill Moreno says that it is unlikely to be voted in; however, it is a proposal that we should pay attention to because it could have significant consequences. “The plan is unlikely to be submitted in its current form. That is mainly because of three reasons,” said Moreno. “The Trump administration is not enthused about this plan; it could be a violation of WTO rules; and there is a strong opposition from retailers, like motor vehicle manufactures. For these reasons, it is unlikely that this bill will pass in its current form.”
LOS ANGELES—The new border-adjustment tax plan is meant to tax imports and subsidize exports with a goal of encouraging US companies to reshore and bring jobs back to the US. At the annual Pulse of the Ports conference, Mario O. Moreno, senior economist at IHS Maritime and Trade, said that many trade partners may see the move as a protectionist measure, and may be met with hostility. The bill still needs to go through Congress, and is unlikely to pass.
The bill's goal is to bring jobs back to the US by encouraging companies to reshore operations, however, there is no evidence that the move will encourage companies to move home. “The benefit of these measures is that American corporations will return to the US and will generate more jobs,” Moreno said in his speech. “However, there is no consensus as to the impact on the labor market, and there is concern that the number of jobs will not be significant.”
In addition to not brining jobs back to the US, the bill may also impact imports with other countries retaliating by imposing their own tax on imports. “This move may be perceived as protectionist measure by many of our trading partners. As a result, they may impose retaliatory tariffs or taxes for many of our exports” said Moreno. “Certainly, many of our retailers will be dramatically affected by these changes in our taxation, and they are heavily opposed to it.”
As a result of the challenges with this bill Moreno says that it is unlikely to be voted in; however, it is a proposal that we should pay attention to because it could have significant consequences. “The plan is unlikely to be submitted in its current form. That is mainly because of three reasons,” said Moreno. “The Trump administration is not enthused about this plan; it could be a violation of WTO rules; and there is a strong opposition from retailers, like motor vehicle manufactures. For these reasons, it is unlikely that this bill will pass in its current form.”
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