Border Tax Opponents List 10 Hardest-Hit States

Michigan is top among the mostly-Republican held states that would suffer most, according to groups backed by Koch Industries.

As the wrangling between CEOs over the desirability of a border-adjustment tax intensifies, some of its fiercest corporate opponents have just named the 10 states they believe would be hardest hit.

And most of them are red states, according to a document released this morning by the Koch Industries-backed advocacy groups Freedom Partners and Americans for Prosperity.

The report claims that all 50 states will suffer damage to their economies, but separates out the top 10 most vulnerable to higher import tariffs. Seven are states held by Donald Trump in November, including, in descending order of vulnerability: Michigan, Louisiana, Tennessee, Kentucky, South Carolina, Texas and Georgia.

The three states in the top-ten won by Hillary Clinton include New Jersey, Illinois and California.


Koch Industries is controlled by CEO Charles Koch and his brother David, who have long been outspoken critics of the 20% border adjustment tax championed by House Republicans including Speaker Paul Ryan.

Their empire includes businesses that market everything from fuel, building materials and fertilizer to beef, bedding and Lycra for clothes.

CEOs from across the retailing sector, including the heads of Walmart and Target, are concerned a tax on the imports they sell to U.S. consumers will push up product prices, sapping demand, eroding their profits and damaging the wider economy.

CEOs of big exporters, including Boeing and GE, however, support the plan, which would free export revenue from taxation and help fund a cut in America’s headline corporate tax rate.

Supporters of the tax plan argue it would bring America into line with some other countries and ultimately strengthen the dollar, offsetting the impact on importers. But opponents aren’t convinced that currency movements will be so uniform and easy to predict.

“A new trillion-dollar tax would make going to the store, filling up the gas tank, buying critical medicines and saving for the future more difficult,” American for Prosperity government relations head Brent Gardner said.

“While the Senate has signaled this proposal won’t pass muster, the continued push for a 20% import tax in the House is endangering our chance to achieve comprehensive tax reform.”

Some Senate Republicans have indeed suggested they’re uncomfortable with the tax, making its evolution into law fraught with hurdles, given the Senate is only held by a slim majority.

And the last thing Trump needs is for his tax plans to fall into disarray after the failure of his heathcare plan.


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