Trump has promised a sweeping overhaul of the US tax code to protect US exporters. However, the Republicans cannot make up their minds on what to do. Meanwhile, with no leadership from Trump, divisions in Congress are widening.

Please consider Trump Muddies the Waters on Import Tax Plan.

Donald Trump’s refusal to take a clear position on a controversial import tax is perpetuating uncertainty over tax reform and underscoring divisions in the administration and Congress over policies rooted in economic nationalism.

In his speech to Congress on Tuesday, Mr. Trump voiced the “America first” complaint that US exports were taxed more than imports coming into the country, but he declined to say how he thought that problem should be solved.

The ambiguity did not stop both sides of the debate over the import tax — also known as a “border adjustment” in a plan devised in the House of Representatives — from spinning his remarks as a positive signal for themselves.

Kevin Brady, the Republican lawmaker in charge of the plan, said the president was “obviously on the same page” as himself. Retailers, which face potentially devastating tax bills as big importers, said Mr. Trump seemed to be hinting at the case for targeted tariffs, not a new tax.

Rohit Kumar, a former aide to Senate majority leader Mitch McConnell who is now at PwC, said: “I don’t think the vagueness or lack of specificity on border adjustment was an accident. These were well-planned, well-executed remarks. I think they did what they sought to achieve.”

Similar divisions have emerged within the Trump administration. Wilbur Ross, commerce secretary, and Peter Navarro, head of a new National Trade Council, are in favour of a border adjusted tax. Gary Cohn, head of the National Economic Council, is against it.

Mish Suggestion

An import tax is a bad idea. It will raise consumer prices and do little for exports because countries will retaliate. It’s also againt WTO rules.