Experimental feature

Listen to this article

00:00
00:00
Experimental feature

As US President Donald Trump reportedly voiced some of his strongest support yet for a border-adjustment tax — which is designed to boost exports — companies that rely heavily on imports have seen their shares take a hit.

Several major retailers saw their shares sink on Thursday afternoon after Reuters published an interview with Mr Trump discussing the proposal.

Best Buy each fell 3 per cent, Wal-Mart was off 0.5 per cent, Target declined 1.4 per cent, Kohl’s was down 2 per cent and Nike dropped 1.46 per cent. The S&P retail ETF, which tracks the performance of the S&P 500′s retail sector, finished the day down 2.3 per cent.

All of those companies are part of a trade group, Americans for Affordable Products, which was created recently to oppose a border-adjustment tax said to be under consideration by Mr Trump and Republican lawmakers, who have pledged to push a tax reform plan this year as part of Mr Trump’s pro-growth agenda.

While the details of such a proposal are not yet available, a border-adjustment tax – a form of which have been adopted by numerous countries – would tax imports while offering a rebate for exports, proving a net boost for domestic manufacturers while weighing on those that rely on goods made cheaply overseas. Among the industries most likely to be impacted are apparel and consumer-goods companies, according to UBS analysts.

In the Reuters interview, Mr Trump offered some of his strongest support to date for such a measure, saying that he “certainly” supports “a form of tax on the border,” and that “it could lead to a lot more jobs in the United States.”

Get alerts on Retail sector when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Comments have not been enabled for this article.

Follow the topics in this article