As the Trump administration takes charge, talks of “border adjusted tax” are now taking center stage. Part of the House GOP’s corporate tax reform plan, this change would lead to a 20% tax on goods sold in the U.S. but manufactured overseas which are imported into the country.
While the reform plan also proposes the reduction of corporate taxes on profits from the current 35% to 20%, it clearly favors exports over imports. Retailers such as Under Armour (NYSE: UA), who manufacture a significant percentage of their products overseas and depend on the domestic market for sales, can be severely impacted by this proposed change in taxes.
