How Will Your Favorite Store Be Impacted By Congress’ Consumer Tax?

Saving up for your first car? To buy new threads for the job you just landed? Or even to furnish your apartment, condo, or first house? Get ready for these goals to get a little further out of reach.

 Congress is considering a trillion-dollar border adjustment tax (BAT), a consumer tax which would add a 20 percent tax to all imported goods. CNBC is reporting that the BAT consumer tax will have negative consequences for several businesses, and many of Millennials’ favorite retailers will be among the hardest hit. 

  • Gap, Urban Outfitters, Fossil, and American Eagle are some of the most at-risk retailers because many of these brands import nearly 100 percent of their products to sell domestically.
  • Analysts predict Abercrombie & Fitch will see earnings drop by a whopping 132 percent.  
  • Under Armor is forecasted to lose 40 percent of its earnings.

Retailers will respond by shifting the cost to consumers. Ledbury told CNBC it is deciding between raising prices or cutting workers’ hours.

 Overall, the National Retail Federation reports the BAT consumer tax could cost households an estimated $1,700 in higher prices for everyday goods in the first year alone.

 Young adults will be hit particularly hard by increases in costs of everyday necessities, leaving them with less disposable income to achieve those financial goals that will help them get a foothold in life.

Author Generation Opportunity

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  • goodwater

    I’m all for it. These business should be buying their products from American manufacturers. Once these foreign made products are not purchased someone will begin to manufacture them with American labor right here in the U. S.

    • Jeff C

      That’s assuming it’s still cheaper to make the products in the US with the addition of the tax. That isn’t so. What needs to happen is America stops fretting about manufacturing jobs which are menial, and start focusing on jobs that are in demand, retraining if needed.

    • Kevin Early

      Why should they only be manufactured in America? You do not know much about economics or trade if you think so. A lower cost good is almost always a win win for both the consumer and the business… But let’s pretend its their fault we don’t manufacture clothes, the real jobs of the future…

    • Josh Kohler

      Yes because americans wont want 20 dollars an hour to manufacture jeans? The reason things are made overseas is because it’s far cheaper. Do you have the income to prop up 100 dollar wrangler jeans? 300 dollar sneakers? 10 dollar heads of lettuce?