Source domestically and get inflation going .... we have 20 T in debt we need to inflate our way out of

Apparently, a 30% border tax is being tossed around. Is this actually going to happen?

Those damn Democrats are at it again...

I could see a border tax for FINISHED GOODS.....but raw materials? Or what about components that are piecemeal assembled in other countries but completed here in the US?

As usual (whether Republican or Democrat) -- the devil is in the details --

 
A border tax would be aimed at bringing production back to the US, which is discouraged by other parts of the tax code. Imports would be taxed while exports could receive tax benefits. Many countries have a VAT type system that taxes consumption instead of income. The US is the only OECD country without a VAT tax. The border tax proposal is a Republican Congressional proposal and is not necessarily going to be endorsed by Trump or the Senate (it may only be able to be passed by the Senate via a budget reconcilliation bill that only requires a 51-vote majority). Trump needs to try to find a compromise.

The proposal is part of the tax overhaul that would also see corporate taxes reduced to 20% from 35% (or to 15% under Trump's proposal and there are other differences too). A new border tax may breach WTO rules, but this is unclear. China, Canada, Mexico and Europe would feel the biggest impacts, as they are the US's largest trading partners. These countries would likely challenge the new tax, if implemented, at the WTO.

It's a long way from happening, but clearly there are serious discussions on it. Tax reform will be a slow process, coming only after healthcare...
Academics also think it would cause the USD to strengthen, which Trump doesn't want.

It would benefit companies that export a lot. Think GE and the like.

That is of course until other countries reciprocate and even megacorps would feel the sting. It's a great idea if your goal is to nuke the global trading channels. Dimwits who cheer this kind of belligerence are most likely already un(der)employed and will just blame the elites for everything.

Good analysis. I read some other thoughts on this subject and this stood out to me:

"The trade-weighted value of the U.S. dollar will appreciate in a range of 15 percent to 25 percent, the consensus among economists. That sharp increase would cause rapid swings in the value of global assets and commodities and make U.S. goods and services less competitive.

"The resultant losses on U.S. holdings of foreign assets and windfall gains of foreign holdings of U.S. assets will create payment shocks for overseas dollar debtors with estimates approaching $8 trillion. A rebalancing of foreign portfolios will lead to U.S. asset sales. These trillions in paper losses as well as a sharp drop in collateral value would severely affect consumer and business confidence, reduce spending, and weaken the U.S. economy."

Full story here:

https://www.bloomberg.com/...order-tax-would-mean

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"The great pleasure in life is doing what people say you cannot do."

I'd be curious if this could end up leading to another bout of stagflation. We have low official unemployment, but the under employment number is high. Thrump's Border Tax could cause prices to rise too quickly as countries retaliate, with no real wage growth. I'd think the only way that it would happen is if the energy sector also sees dramatic price increases.

Why is it that when we suggest adopting a practice that just about everyone else already does, it's like declaring war on everyone else, and will ruin the world economy and our's, too?

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"People think it must be fun to be a super genius, but they don't realize how hard it is to put up with all the idiots in the world."

Source please? U6 is at historically "normal" to "low" levels and should account for the marginally attached population.

There was a general economic debate between Republicans and Democrats that took place in the 1980s.
Reagonite Republicans argued in favor of free trade, low taxes, and little inflationary government spending.
Carter era Democrats argued in favore of trade barriers, high taxes and stimulative government spending.

The Reagonite republicans won this debate. Reagan's policy's appeared to work. There was growth. And importantly inflation was brought under control.

Democrats surreptitiously recognized the victory of Reagonomics. They surrendered on a number of issues.

This democrat "liberal" surrender to logic of global capitalism was brought to its highest level - when free market initiatives were brought forward by Clinton and later Obama.

It is not the resurrection of Carter era economics that has "liberals" upset.

It is that after having lost every economic debate for the last 20 years "liberals" now find Republicans arguing against free trade and in favor of protectionism and inflammatory spending.

But who knows maybe Carter was right.
We will find out if Trump gets his way.

Horrible idea.

Good thing it's not going to happen.

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Civilize the mind, but make savage the body.

- Chinese proverb

I think you are spot on. I don't see any real wage growth coming.

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"The great pleasure in life is doing what people say you cannot do."

Should have read "higher".
I looked at the pre-'07 recession numbers(couldn't find U6 for Carter's admin, only goes back to 90's I think) and the spread between official and U6 is running about 1% higher than pre-recession.

It's not actually what everyone else is already doing. Other countries have a corp. income tax and VAT. We have corp income tax and a dizzying array of state sales tax jurisdictions. I'm all about a federal VAT replacing the shitshow that is state sales tax laws. But what they're discussing is in addition to this all. It will make life miserable domestically first. Since the global system is already set up with the current tax structure built in as a basic assumption - making such a major change would definitely send shockwaves throughout the world.

Also...the US economy sort of dwarfs a lot of the economies that people are pointing to as examples of working border adjustment cases so the global implications of changes to our policies here are more significant.

If they're smart they'll introduce a VAT tax to avoid rattling the WTO. A VAT tax accomplishes the same thing, functionally, as a BAT tax with the only difference being that you have to lower personal income taxes to mitigate the direct effects for consumers.

They could also try a "reciprocal tax" which would be more complicated but, basically, goods would be taxed when they enter the U.S. at the same rate at which they are taxed in foreign countries. Again, this would avoid shaking up the WTO while accomplishing the trade goals of the Trump administration.

With all of that said, your company shouldn't rule out the possibility of a BAT. Hope for the best and prepare for the worst.