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Trump's 20% Border Tax Could Be A Tactic Referenced In 'The Art Of The Deal'

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Trump's 20% Border Tax Could Be A Tactic Referenced In 'The Art Of The Deal'

President Donald Trump wants to enact a 20 percent "border tax" on all goods manufacturing abroad into the United States. Naturally, this has many investors concerned, especially apparel and retail investors whose business relies on cheap imports of products.

But this could be part of Trump's negotiating tactic he made famous in his 1987 book "The Art of the Deal."

According to CNBC's Jake Novak, Trump made it clear in his book that he's a strong believer of entering a deal with an almost insane opening statement. Maybe this applies to the border tax and Trump is really eyeing a 2 or 3 percent border tax.

Novak went on to take a deep dive of what a 2 percent border tax would imply. In 2015, the U.S. imported $295 billion worth of goods from Mexico and a 2 percent tag would have theoretically brought in $5.9 billion.

Assuming this is a consistent tax revenue stream, the president's border tax would reap in more than enough money to cover the cost of the border wall with Mexico with plenty of money leftover.

Trump would naturally look better in the eyes of the American people as it seems he is backing away from his original 20 percent figure and settling for a mere 2 percent tax rate - even though this is what he was hoping for from the beginning.

"That kind of a decrease would simply make the White House sound very reasonable and fair, wouldn't it?" Novak wrote. "That's how Trump negotiating tactics work: They flip the script on the other guys across the table."

Posted-In: Border Tax CNBC Donald Trump Jake Novak MexicoPolitics Media General Best of Benzinga

 

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