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Ch. 26 · USTR / Trade·Proposed·

Consider destination-based border adjustment tax as tariff alternative

Navarro notes the Ryan–Brady border adjustment tax proposal as a legislative alternative that would deny import deductions and exempt export income, leveling the field under WTO rules without classic tariffs.

Mandate

Mandate Ch. 26 (Trade) — The Case for Fair Trade (Navarro): beyond USRTA, a conservative Administration might look at a border adjustment tax (as proposed by Ryan/Brady in 2017) shifting corporate tax from origin- to destination-based taxation of imports vs. exports as an innovative alternative to tariffs.

Undo plan

1) Reject destination-based cash-flow / border-adjustment tax proposals that tax imports via corporate-income redesign. 2) Keep origin-based corporate tax base without import nondeductibility / export exemption schemes tied to trade balancing. 3) If enacted, repeal border-adjustment provisions and restore prior IRC treatment of COGS and foreign sales. 4) Separate genuine tax reform from trade-deficit targeting tools. 5) Verify: Joint Committee on Taxation score and customs/corporate-return audits confirming no import-deduction denial.

Sources