U.S. border tax proposal faces domestic opposition
WASHINGTON — Canadians concerned about the idea of a tarifflike tax being imposed on all U.S. imports might be pleased to learn the policy faces huge opposition in Washington.
That’s the message being taken away from a Washington visit by Canada’s Natural Resources Minister Jim Carr.
A series of meetings this week with lawmakers, administration officials, and business people have raised questions about whether that import tax has any chance of passing in an upcoming omnibus tax bill.
“There was very little support for it,” Carr told reporters Thursday.
“It’s not just that people here are expressing an agreement in principle with free trade. It’s that they are specifically saying that a border-adjustment tax would not move along the interests of Canada and United States in the energy market, and that was expressed to us with any number of people with whom we met.” Others put it more bluntly. A Democratic lawmaker, John Delaney, told a panel on CanadaU.S. infastructure this week hosted by The Hill newspaper: “Let’s face it — it’s never going to happen. … It doesn’t have the votes. We’re never going to do it.”
The original proposal comes from Republican leaders in the House of Representatives and is designed to achieve two goals: raising revenues to offset tax cuts, and to repatriate cash and jobs sent overseas by U.S. companies.
The U.S. Tax Foundation estimates the proposal would raise a massive amount of cash — about $1.1 trillion US over a decade.
The stated logic behind it is that other countries already offer refunds on value-added taxes such as the GST when companies export products to the U.S., and that those act as an incentive for companies to move abroad and export their products back into the U.S.
Critics say the idea would provoke a trade war, face international sanctions and drive up the cost of everything Americans import.
It has fierce opposition within the White House itself, and U.S. President Donald Trump has sent mixed messages about the proposal.