Trump Administration To Unveil Tax Plan, Protective Policies for US Industries
April 26, 2017
President Donald Trump is set to unveil his proposal for comprehensive tax overhaul on Wednesday; Commerce Secretary Wilbur Ross said the Trump administration is considering launching trade actions to protect the U.S. aluminum, semiconductor, and shipbuilding industries; U.S. crude oil inventories decreased by 3.6 million barrels last week as total crude reserves stood at 528.7 million barrels.
- President Donald Trump is set to unveil his proposal for comprehensive tax overhaul on Wednesday, which is likely to include a slashed corporate income tax rate and steeply discounted tax rate for repatriation of overseas corporate profits. The plan is not anticipated to include any proposals for raising new revenue, however, which could contribute substantially to the federal deficit. Treasury Secretary Steve Mnuchin has been leading the administration’s effort to craft a tax package that can win support in Congrees, though some elements of the plan, notably the deficit build, will be difficult to sell to members of the president’s own party who have vowed to block such increases. Trump’s plan will cut corporate income tax to 15% from 35% and will allow for repatriation of foreign earnings at 10%, versus the current 35%. The proposal will not include a controversial border-adjustment tax on imports that had intended to offset revenue losses resulting from tax cuts. Secretary Mnuchin has said the revenue cuts will pay for themselves with offsetting economic growth. [Reuters]
- Commerce Secretary Wilbur Ross said the Trump administration is considering launching trade actions to protect the U.S. aluminum, semiconductor, and shipbuilding industries at the same time as it ramps-up free trade talks with the European Union, Japan, and the U.K. The secretary left open the possibility that the U.S. government might intervene to help Westinghouse Electric – the nuclear reactor company that filed for bankruptcy protection in the U.S. last month and a unit of Japanese Toshiba Corporation – recapitalize. Mr. Ross said access to nuclear power was a matter of national security. Ross made clear that these protectionist policies are just the beginning of a more aggressive trade-enforcement strategy to be unveiled in the coming months. The administration maintains that tariff-protection for aluminum, semiconductors, and shipbuilding, along with motor vehicles, steel, and aircraft, can be legally implemented under a 1962 trade law that allows the government to equate U.S. manufacturing to national security. Ross said that he anticipates a complete re-write of the North American Free Trade Agreement in the year ahead, and he commented that the administration was preparing to revive negotiations regarding trade and investment pacts with the EU and China. [WSJ]
Economic Indicators & News
- U.S. crude oil inventories decreased by 3.6 million barrels last week as total crude reserves stood at 528.7 million barrels, near the upper limit of the average range for this time of year, as American petroleum imports were up by 1.1 million barrels to 8.9 million barrels per day. Petroleum refinery inputs rose by 347,000 barrels per day to 17.3 million as refineries operated at 94.1% of their available capacity. Gasoline production declined by 100,000 barrels last week to average 9.7 million barrels per day while distillate fuel production fell to 5.3 million barrels per day. Total product supplied to end users was down by 2.2% over the year ago period to 19.5 million barrels per day. Motor gasoline supplied dropped 1.8% over the same period last year to 9.2 million barrels per day. The prior week’s crude inventory levels declined by 1.0 million barrels. [EIA]