In an interview with the Financial Times on Monday, US Treasury Secretary Steve Mnuchin repeatedly rebuffed inquiries about a proposed border adjustment tax, while reiterating his opinion that a strong dollar is important for the US economy.
On the value of the dollar
Responding to a question regarding President Trump’s recent about-face on the importance of a strong dollar, Mnuchin explained why, over the long term, a strong dollar is good for the US.
“The strength of the dollar is a little bit like the strength of the stock market. In my mind it’s a function of the confidence in the potential of the US economy and the current state of the US economy, particularly relative to the rest of the world.”
On the border adjustment tax
After being repeatedly pressed on a proposal that would place a tax on imports while exempting exports, Mnuchin emphasized that the administration is looking at other options.
“SM – It’s just one of the ways that you can raise $1tn. And I might add, people refer to the $1tn net that it raises, but you need to understand it’s actually something like $5tn on one side, and $4tn on another side in round numbers. So, it has very big implications to the economic system. There may be other ways to get to that $1tn, which we’re exploring […]
FT — What other options are there to raise $1tn? It’s not easily done.
SM — I would just say that there’s a lot of options.”
On Tax reform
With the White House returning to the issue of healthcare, the timeline for tax reform is likely to be pushed back, though it remains a priority for this year.
“SM — What I said from day one was that August was an aggressive deadline. I think that we’re now shooting to have the plan in place, but I think at this point it’s unlikely that we’re going to have a plan passed before August. Just given where we are and the delays that went on other things.
It doesn’t mean that we’ve given up on it, but I would say that realistically it started as an aggressive timeline, and it’s fair to say that it’s probably delayed a bit because of the healthcare.
FT — But do you still think it could be something which is in time for 2017 tax returns?
SM — Absolutely. And I go back to saying it’s a big part of the president’s agenda to create economic growth.”