Trouble in Paradise? Trump and Koch Brothers Spar Over Border Adjustments

It seems as if there is trouble brewing for President-Elect Donald Trump, as his administration has recently drawn fire from the powerful conservative fund-raising and lobbying powerhouse Koch brothers, Charles and David.

The brothers are angry over a proposed import tax that they say could have potentially have devastating consequences for US consumers. They argue that these policies will force consumers to pay higher prices and, at a point in time where the economic recovery seems to finally be stabilizing, could create a scenario for a new recession.

The Koch brothers join a chorus of trade supporting groups and companies that have also spoken out against the import tax being proposed by the incoming Trump administration. These groups argue that big box merchants alike Walmart and Target, which make up a growing percentage of the US economy, will be rendered obsolete, as these companies rely on purchase sing goods in bulk and cheap in order to help keep prices low. Without the ability to do that the stores will have no choice but to increase prices or to take a hit to their profits.

The policy, known as boarder adjustments, has not been officially endorsed by Trump. Rather it is part of a broader package that is being passed around. This is particularly as these groups are heavy republican donors and it remains to be seen how far the GOP will go in enacting Trump’s agenda and to what extent it will be altered by donor concerns.

One industry that is particularly concerned about the new policies in the garment industry. The garment industry makes up a large part of the economy in many countries such as Bangladesh and Pakistan. The collapse of these economies could set back the global recovery or even drag the world back into recession.

It remains to be seen how President-Elect Trump, the House GOP, and other interested parties will play this situation. No matter what though, the fear that is being created by the uncertainty now is already doing harm in some sectors of the economy

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