Retailers Meet with Trump Over Import Taxes
President Trump Meets with Retailers
At the beginning of the month, we told you about retailers forming a coalition called Americans for Affordable Products to battle any import tax increases like a Border Adjustment Tax (BAT), part of a House Republican plan, would do.
This week, CEOs of companies in that coalition met with President Trump, voicing their concerns.
The Khadeeja Safdar and Louise Radnofsky report in the Wall Street Journal (WSJ):
Chief executives from several major U.S. retailers, including TargetCorp., Best Buy Co. and Gap Inc., met with President Donald Trumpon Wednesday to lobby against a proposed tax plan that would hurt their profits.
…
… the retailers at the meeting, which also included J.C. Penney Co.and Walgreens Boots Alliance Inc., stand to lose more than do other industries if Mr. Trump imposes new tariffs on trade or taxes on imports. Most rely heavily on overseas factories for the goods they sell.
It was actually the Retail Industry Leaders Association (RILA) rather than Americans for Affordable Prices that organized the meeting with the president according to the article, but there is such overlap in the membership of the two organization that both released statements about the meeting with President Trump.
The RILA released a brief statement by Bill Rhodes, President, Chairman and CEO of AutoZone:
“Today, we had a positive and productive conversation with President Trump about the important role the retail industry plays in our national economy.
“We stressed the importance of taking a thoughtful approach to tax reform for both individuals and corporations.
“The retail industry is the nation’s largest private sector employer providing and supporting more than 42 million American jobs. The President understands we support pro-growth policies that we believe will lead to greater domestic investment.
“We look forward to working with the President and his Administration on the issues of importance for our industry, our employees and American working families, who by and large are our customers.”
The Americans for Affordable Prices statement was even shorter but added background focusing on retail’s position as Americas largest employment sector:
“Today’s meeting between executives and President Trump focused on pressing issues confronting American families: economic growth and domestic investment. Americans for Affordable Products represents the nation’s largest employment sector supporting more than 40 million jobs or nearly one in four employed Americans, and we stand ready to work with the new administration in advancing pro-growth policies that work for all Americans, particularly middle-income households,” said Americans for Affordable Products
BACKGROUND:
PricewaterhouseCoopers LLP: Retail Is The Nation’s Largest Employment Sector Supporting 42 Million Jobs & Representing Employment For Nearly One In Four Americans. “Retail is the largest private-sector employer in the United States, supporting one out of every four jobs. A healthy and vibrant retail industry delivers a powerful impact across our economy … Retailers directly provide 29 million American jobs … The retail industry supports a total of 42 million jobs in retail and a host of other industries – 23.4% of total U.S. employment … 13 million American jobs across almost every industry depend upon retail for their success – including 7 million jobs in the service sector; 2 million jobs in finance, insurance and real estate; and 1 million jobs in manufacturing.” (National Retail Federation, Accessed 1/28/17)
Both statements highlight the retailer’s willingness to work with the Trump administration and their sector’s importance to the American economy and jobs. Both statements also emphasized supporting or advancing pro-growth policies, and that may be the most important part of the statements.
When Trump officially announced that he would run for president, he said he would be the “greatest jobs president God ever created,” so pro-growth policies are certainly important to him.
In the meeting he told the retailers, “My administration remains very focused on the issues that will encourage economic growth — that’s what we’re all about.”
However, retailers’ idea of what a pro-growth policy is may be different than President Trump’s as the president immediately talked about manufacturing or production plants moving back into the country with:
“We have a lot of plants moving back into various states, including the state of Ohio, the state of Michigan, Pennsylvania. You have a lot of companies moving back in, coming back into the country, bringing the jobs with them.”
The part of the meeting where import taxes were discussed, if such a discussion really did occur, was not open to the press.
While President Trump has not exactly shown great enthusiasm for the plan that includes the BAT, which retailers oppose, the president has spoken of taxes and tariffs on imports to benefit domestic production over foreign.
It is obvious that Trump respects business leaders and CEOs, as can be evidenced by the many meetings he’s had with groups of such individuals since becoming president. But how much influence retailers, the major importers of the country, will actually have on President Trump regarding these taxes is not easy to assess.
Of course, major U.S. manufacturers and exporters like policies that increase import taxes while reducing or eliminating export taxes in the debate over BAT. It seems likely the president’s policies will fall more in line with this side of the debate.
