U.S. border tax would have been impediment: PM
KENORA — The Trump administration’s decision to drop a proposed border tax removes the threat of a trade war just as Canada, Mexico and the United States prepare to launch negotiations for a new North American Free Trade Agreement, relieved Canadian business leaders say.
But it also potentially reduces the pressure on Prime Minister Justin Trudeau to slash Canada’s corporate tax rate to keep pace with a promised steep reduction in the United States.
The border adjustment tax was intended to offset the massive revenue hole President Donald Trump’s planned comprehensive tax reform — including cutting the corporate tax rate to 15 per cent — will blow in the American budget.
U.S. officials said Thursday that they’re “confident” a tax on imports is no longer needed to pay for broader tax reform.
But privately some Canadian business leaders believe the decision to scrap the border tax means the promised reductions in personal and corporate taxes will have to be scaled back.