On Tuesday, Brian Cornell, CEO of Target, testified against what has been dubbed the border adjustment tax (BAT) to the House tax-writing committee, as many large retailers are leery of a tax on the thousands of products they import from foreign markets. The proposed 20 percent tax on imported goods has been touted as a way to overhaul the nation’s tax system and drive growth in domestic manufacturing. However, many large retail organizations, including Wal-Mart and Target, have strongly opposed the tax, arguing that the increased cost to import goods would ultimately fall to American consumers.
Total Retail's Take: The specter of the BAT being passed into law has many retailers worried, and it's not confined to industry leaders like Target. All organizations that import goods from overseas, from SMBs to enterprise and big-box, will be subject to paying the tax. Higher import costs for retailers will ultimately mean higher product prices for consumers. In an industry where lowest price is at the top of most consumers’ purchase considerations, a BAT figures to have wide-reaching implications. This is certainly an issue that you want to keep your eyes on, and if you believe it could negatively impact your business, consider making your voice heard.