Retailers Amp Up in Fight Against Border Adjustment Tax 

The NRF runs TV spots to get its message across

Author: Andria Cheng

April 14, 2017

Retailers are turning up the volume in their fight against the border adjustment tax, running TV commercials for the first time in a long time to get their message across.

The National Retail Federation aired a parody commercial on Saturday Night Live and on “Fox & Friends” in the New York and Washington markets in March. Now the industry’s biggest trade group is planning to run a second batch of commercials beginning Friday, this time featuring the emotional pleas of three real small business owners.

“I’m really scared,” Vivian Sayward, owner of Vivacity Sportswear in San Diego, said in one of the videos. “We do make our products in the US, but we are importing our textiles and our zippers and our threads. That’s going to be taxed. We are working with margins that are really tight. Twenty percent or more in overhead costs is gonna make my margins that much tighter… It’s scary. Long term I’m not sure my business will survive.” 

The new campaign will be unveiled in several communities across the country as part of the NRF’s move to get viewers to lobby their congressional representatives against the tax.

Top retail executives have been outspoken against the tax, part of the House-proposed tax reform that the NRF said would be equal to a 20% tax on imports and significantly raise prices consumers pay. The NRF has estimated that the tax would cost the average US family $1,700 in the first year alone if enacted. Citing US Department of Commerce Bureau of Economic Analysis (BEA) data, it estimated consumers could expect to see an increase of over $350 per year for clothing if there were a 20% destination-based tax on imports.

The issue has divided corporate America, pitting retailers against major US exporters including Boeing and GE.

Retailers rank among the country’s largest importers, and they said the industry is already the largest U.S. private employer. They also argued while the bill wants to encourage U.S. manufacturing, it’s not possible in many cases as the U.S. no longer has the manufacturing facilities and infrastructure to produce enough to support the demand. For instance, while the U.S. production for shoes and apparel rose for sixth straight year in 2015, U.S. production of shoes only supplied 1.6% of the U.S. market while domestic apparel manufacturing only met 2.7% of the domestic market demand, according to a 2016 study by trade group American Apparel and Footwear Association.

“My main ingredients are chocolate and sugar,” said Erin Calvo-Bacci, the owner of CB Stuffer, a specialty chocolate manufacturer and retailer in Swampscott, Mass., in another commercial. “We have to import these items. I don’t want my company to go away. This (BAT) is going to kill us.”

Whether those personal voices will compel viewers to act and steer the direction of the conversation remains to be seen.