Former U.S. Trade Representative Talks Legality Of A Border Tax, Trump's Cancellation Of TPP

According to Holleyman, there are still plenty of unknowns and variables, including what effect a tax will have on interest rates. Perhaps more important to consider is that a border adjustment tax may not even be permissible under World Trade Organization rules — which the United States helped create.

Hollyeman continued that members of U.S. Congress are looking into the legality aspect of the tax, which the WTO could rule as being an unauthorized government subsidy.

TPP

President Donald Trump officially withdrew the United States from the TPP agreement and this was a mistake, according to Holleyman. He likened the country's membership in the TPP as being in a race against global trade partners, especially China.

"I think we were effectively running a marathon, we were a couple of miles from the finish line, we were in first place, and for the moment we have decided to sit down and sit on a bench and think about how we want to run this race," he explained.

Holleyman further noted that while the United States is "sitting on the bench," trading partners have moved since passed the country and negotiated new deals of their own to create new markets and trading opportunities.

Bottom line, Holleyman stated that the United States has no choice now but to "get off the bench" as "speed matters in trade."