Agriculture, financial services, energy, manufacturing and retail would be adversely affected by the proposed border tax, according to a Americans for Prosperity (AFP) study.
AFP found that the proposed tax could damage industries and cost U.S. consumers more than $1 trillion. While AFP supports pro-growth tax reform, it opposed the border tax, according to a press release from the organization.
“This risky new tax has the potential to handicap huge sectors of the economy, which supply almost a third of the private jobs available to American workers," AFP Deputy Director of Federal Affairs Mary Kate Hopkins said. "Companies in these industries that rely heavily on imports will face a series of poor choices — slashing employment, hiking prices on consumers, shrinking their businesses or shuttering completely. All of those factors make this consumer tax a poor choice for policymakers who want to pass a pro-growth tax reform package.”
The study found that agriculture could be impacted, as more the half the cost of producing crops comes from imported fertilizers and chemicals. Manufacturing also depends on imported raw materials and complex components.
The retail industry, which runs on low margins, would be affected as well. Additional taxes could lead to employee layoffs and rising prices on consumer goods. The added costs of energy, up to 30-40 cents at the pump, would affect other industries, as well as consumers.
In addition, financial services are globally integrated. Policyholders in the United States could owe more than $5 billion if reinsurance instruments and services were taxed.