[3 February/ Food Dive]

The introduction of a Border Adjustment Tax as part of proposed reforms of the US tax code is being opposed by a new lobby group funded by food and grocery companies.  The tax which has been mentioned by the Trump Administration, would see a 20% tax replace corporate taxes and be based on where products are used, meaning exports would not be taxed while imports would be.  Food and grocery organisations see the tax as increasing the cost of food for consumers by as much as 30 to 40% on fresh produce items that are imported because of seasonal requirements during the year.  The US imports 19.4% of the food it consumes and the plan would strongly favour domestic businesses and consumption aligning with the goals of the new government.  The plan appears to be hitting roadblocks, not the least of which is existing trade agreements the US has signed, including the NAFTA agreement with Canada and Mexico.