Larry Kudlow, a top economics adviser to the presidential campaign of Republican Donald Trump, said the White House is now leaning toward putting a levy on imported goods. President Trump in the past wavered on the idea.
The border adjustment tax is part of a plan by Speaker of the House Paul Ryan to change the tax code in a sweeping overhaul. The levy is aimed at boosting U.S. factory production by taxing imports while exempting U.S. companies from taxation on their export revenues.
"Conservative activists" who met with "White House representatives" were told the White House does "favor the border adjustment," Kudlow said on CNBC. He had been a critic of the border tax, describing it as “voodoo economics” in a January interview.
Trump also is on the record as saying he wasn’t completely in favor of the plan.
"Anytime I hear, 'border adjustment,' I don't love it,” Trump told The Wall Street Journal in an interview published on January 16.
In a speech before both houses of Congress on Tuesday, the president explained the need to “create a level playing field for American companies and workers” without providing details on the tax.
“When we ship products out of America, many other countries make us pay very high tariffs and taxes — but when foreign companies ship their products into America, we charge them almost nothing,” Trump said in prepared remarks. “I believe strongly in free trade but it also has to be fair trade.”
Several trade groups oppose taxing imported goods for making foreign-made products more expensive to U.S. consumers. The retail industry is particularly opposed to any plan that will hurt sales and lead to layoffs.
Kudlow, a Newsmax Insider and former adviser to President Ronald Reagan, said the border adjustment tax has key support among the president’s economic advisers.
"The president last night went to the water's edge, didn't quite mention it, but in fact inside the White House, the BAT is winning,” Kudlow said.
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