President Trump has a habit of jumping from one political issue to another, but trade is one area the still-new administration has consistently trained its eye on.
In an attempt to put Trump’s “America First” campaign slogan to work, the early days of the administration seemed open to the prospect of a Border Adjustment Tax proposed by the House last year that would see companies taxed partially based on the amount of products they imported.
The idea of a policy agenda aimed at forcing U.S. companies to manufacture goods domestically was anathema to apparel companies, which have a majority of their production abroad.
Retailers were quick to start pushing back and the National Retail Federation labeled the BAT as essentially a $5.6 billion tax on the American consumer, claiming such a policy would undoubtedly increase the cost of goods.
Some of the biggest merchants in the U.S., including Amazon, Wal-Mart Stores Inc., Target Corp. and Nike Inc., took lobbying into their own hands during the first months of the administration and spent millions to make their stance on issues like trade and taxes known.
While David French, the NRF’s senior vice president for government relations, said the efforts “have been very effective,” he admitted that the proposal “will not be truly dead until we see a tax bill in the House that does not include it.”
Secretary of the Treasury Steven Mnuchin has said the Trump administration wants a tax-reform bill done by the end of the year, but that seems less and less likely as the Trump administration has failed to get its health-care or immigration agendas off the ground.
The North American Free Trade agreement is also in the process of being renegotiated, after Trump initially said he wanted to pull out of the trade pact, like he did with the Trans-Pacific Partnership. But retail groups again made clear their support for the deal.
As for the populist wave that Trump rode into the presidency, it appears to be splintering into a force more concerned with nationalism than economics and leaders in the retail and apparel industry are uncomfortable.
Under Armour chief executive officer Kevin Plank and Wal-Mart Stores Inc. ceo Doug McMillon, who both have voiced support for Trump’s “pro-business” attitude and joined his Manufacturing Advisory Council, took his delayed and mild response to the violent gatherings of white nationalists and supremacists and counter-protestors in Charlottesville, Va., as reason to start pulling away from the presidency.
Plank decided to leave his seat on the White House’s American Manufacturing Council and McMillon released a statement critical of Trump’s reaction, saying “he missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists.”
Despite his take on the president’s response, McMillon said he was staying on the council. Trump subsequently disbanded the group, along with his Strategic and Policy Forum, aimed at creating jobs and stimulating the economy, saying on Twitter that he didn’t want to “pressure” businesspeople.
The disbanding came less than a day after Trump tweeted he had “many” executives to take the place of those who had left his councils.