The Border Adjustment Tax (BAT) or no BAT roller coaster continues with today’s CNBC interview with Kevin Brady (Ways and Means Committee Chairman) [LINK], which will bring some BAT worries back on the screen. The House Republican leadership didn’t waste much time in clearly stating that BAT is a critical element of tax reform and that it will be included in any tax reform, at least from the House Republican leadership side. So much for the one day BAT relief that we highlighted in our Feb 14 blog on Trump’s comments that he only needed to tweak Canada’s trade relationship [LINK].
The question of BAT can be settled very quickly, one way or another, especially if Trump comes out, as CNBC suggests, with a tweet or a comment specifically saying where he is on BAT. There is still the Senate (where a number of Senate Republicans are against or at least questioning BAT), but if Trump says he is onside with BAT, the momentum will clearly go in that direction. It would be very interesting to see what happens if Trump comes out with a No BAT position. As of our sign off at 8pm mountain time, we have not seen any Trump tweet. Until that happens, we have to wait for his tax reform unveiling sometime in the next couple weeks.
Continue reading “Waiting For Trump To Be Specific Now That House Republicans Stress “BAT” Is Critical To Tax Reform”
There was a big relief felt at lunch yesterday in Calgary with the Trump/Trudeau press conference, when Trump said the US/Canada has an “outstanding trade relationship, we will be tweaking it, we will be doing certain things that will benefit both of our countries, it’s a much less severe situation than is taking place on the southern border. For many many years, the transaction was not fair to the United States, its an extremely unfair transaction, we are going to work with Mexico, we are going to make it a fair deal for both parties, I think that we are going to get along very well with Mexico, they understand and we understand.” This is being viewed as a big confirmation for those that didn’t expect to see a House Republican Border Adjustment Tax (“BAT”) enacted that would hammer Cdn oil and gas exports to the US (“No BAT”), and also cause the Yes BAT to at least question their views. Note we are discussing BAT only related to Cdn oil and gas exports to the US.
BAT is part of the House Republican overall tax reform plan and is a term from the House Republican “A Better Way” tax plan released on June 24, 2016. This was not a joint House/Senate plan nor a Trump plan, but a House Republican plan. BAT is only part of the plan, which included the full picture of tax reform items such as corporate tax cuts, personal tax cuts, bring back money from foreign subs, etc. The BAT language is pretty clear “sales to US customers are taxed and sales to foreign customers are exempt”. The BAT fears are that all countries are included, including Cdn oil and gas exports to the US would end up being hit by a 20% tax.
Continue reading “Trump “Tweak” To Canada Trade Could Carry A “No BAT” Tone For Months”