Some of the biggest names in retail have joined together to launch Americans for Affordable Products, a campaign to defeat the border adjustable tax (BAT).
The group, which includes Best Buy, Gap, IKEA, Macy’s, Nike, Target, Walmart and many other retailers and trade associations, is opposed to the BAT on the grounds that it will increase the cost of a wide variety of goods, such as apparel, food, medicine and other items that are part of the everyday lives of Americans.
Americans for Affordable Products charges that passage of the BAT would put the government in the position to pick winners and losers. The losers would be companies that import products as well as the consumers who buy those products. The winners would be a smaller group of businesses that do not.
The Retail Industry Leaders Association (RILA), whose members include some of the largest retailers in the U.S., also opposes the BAT.
“The border adjustable tax is harmful, untested, and would put American retail jobs at risk and force consumers to pay as much as 20% more for family essentials,” said Sandy Kennedy, RILA president, in a statement. “We are committed to working with Congress to ensure they understand the impact of this proposal and to pursue tax reform that reduces rates and benefits consumers and retailers alike.”
Proponents of the BAT argue that the effects would not be as severe as critics suggest. The reasoning is that the value of the dollar and foreign exchange rates would increase in proportion with the taxed imports.
William Dudley, CEO and president of the Federal Reserve Bank in New York, spoke last month at the National Retail Federation Big Show. He called the BAT “a risky experiment for America.”
“I’m not of the view that import prices would go up 10% [and] the dollar would appreciate by exactly 10% so that the value that retailers pay for the imported goods would be exactly the same in dollar terms,” Dudley said.
