US retail industry to step up opposition to Trump border tax

Washington lobbyist calls on Irish retailers to boost their engagement with politicians

The top Washington lobbyist for the US retail industry says any attempt by President Donald Trump’s administration to place a mooted levy on imports – which could cripple Irish exporters of food and clothing to the US – will “doom” the former businessman’s attempts to overhaul the US tax code.

Matthew Shay, chief executive of the National Retail Federation (NRF), the world's largest retail lobby group, was speaking in Dublin on Wednesday ahead of an address to leaders of Retail Excellence Ireland, which represents Irish retailers' interests.

Republican leaders in the US House of Representatives want an import levy – also known as a border adjustment tax (BAT) – of up to 20 per cent to help bridge the cost of corporate tax cuts. It was also a vague Trump campaign promise.

Introducing such a tax would drive up the price of imported consumer goods in the US, thus making exporters from Ireland and elsewhere less competitive. Mr Shay cited Irish drinks companies and traditional clothing manufacturers as being among those who would be hit.

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The BAT was absent from an outline tax plan published by Mr Trump last month. In comments likely to be well received by Irish policymakers, Mr Shay said the influential NRF will step up its campaign to keep the measure out of any future reform plan.

‘Supportive’ industry

"It is a bridge too far," he told The Irish Times. "No industry is more supportive of US tax reform than retail, but we want to save [a reform plan] from elements that would kill it. We think a BAT would sink the plan."

He said the NRF had found “many members of the legislature and some in the [Trump] administration who recognise the problematic nature of BAT”.

Mr Shay warned, however, that the proposal could yet come back on the agenda if proposed again by other Republican politicians: “We can’t assume it won’t show up again somewhere.”

He said the NRF had made a “compelling case” for why a BAT would not be a good idea.

“We will continue to make the focus on those who it will hurt – consumers, who are also voters. Look at the people who voted for this president. I don’t think very many of them voted for a tax increase on everything we buy.

“It’s very early in the game. The president has only published an outline [of his tax reform plan]. The House or Senate have no Bill yet, so there is a lot of divergence. It isn’t clear who supports [BAT]. There still many unanswered questions.”

Conference

Mr Shay was due to address Retail Excellence Ireland's executive council on Wednesday, at a conference hosted by the lobby group at Croke Park. The conference speakers included Kenny Jacobs, chief marketing officer at Ryanair, and celebrity retail "futurist" Howard Saunders.

Mr Shay said he would encourage Retail Excellence Ireland to step up its engagement with Irish politicians on issues within the retail trade here, which include gaining more State help for traditional retailers to migrate online, and tackling rising costs such as rates.

“You have to build up a lobbying presence commensurate with the size of the industry. [Retail Excellence Ireland] should be telling [policymakers]: Listen to us, and here’s why.”

He also encouraged Irish retailers to make their voices heard directly to government, in addition to via their trade groups such as Retail Excellence Ireland.

“You need the retailers in front of you, not just behind you. That will enhance credibility.”

Mark Paul

Mark Paul

Mark Paul is Business Affairs Correspondent of The Irish Times. He also writes the Caveat column