Stores desperately try to prevent huge price increases
The Short Version
Your favorite retail store has your back as every major retail trade group opposes the so-called Border Adjusted Tax proposed by House Speaker Paul Ryan. Retailers say the tax would result in price increases of 20% or more and could make many products completely unavailable to American consumers.
Avoiding Sticker Shock
Almost everything you buy, even if it comes with a “Made in America” label, has some parts of pieces imported from outside the United States. This division of manufacturing and labor has become standard operating procedure for almost every American-owned company. That practice is under attack, however, as the Republican members of Congress and the 45th president vow to use taxes as a means of encouraging domestic production.
Retailers, however, say the plan is severely flawed and would not only result in higher prices for consumers but would likely cost several thousand jobs across the country—the exact opposite effect from what Republicans claim the tax will do.
Complicating the whole matter is the fact that Republican leadership in Congress and the 45th president are not on the same page. While the Republican proposal would increase import taxes 10-15%. the president has been pushing an import tax as high as 35%. The president has also criticized the Republican plan as being too complicated.
The National Retail Federation, along with the American International Automobile Dealers Association, and the National Grocers Association have joined forces with smaller trade groups and independent retailers such as the LVMH luxury group to form Americans for Affordable Products. The purpose of the new group is to present a unified front in educating the public of the potentially negative results of the import tax as well as lobbying Congress on behalf of the retailers. They’re not waiting until a final bill is proposed. They want to stop any increased taxes before they ever get started.
Who all is involved? Everyone. Nike. Target. Wal-Mart. Best Buy. LVMH-owned brands Donna Karan, Fendi, Givenchy, and Kenzo. Dollar General. Pretty much every store you ever shop, regardless of whether you shop bargain basements or the luxury mall, is against the import tax being raised.
Why? Because even things as simple as pencils and toilet paper have production pieces that are imported. Any rise in the import tax not only results in higher prices for consumers but in many cases would result in layoffs of American employees. The end result would almost certainly be an economic tailspin resulting in a recession larger than that of 2008.
While almost everyone is in favor of increased domestic production of products, the consensus among those who actually produce and sell those products is that increased import taxes is not the way to achieve that goal.