The BTA and unintended consequences

A proposed tax reform may reward US exporters—unless the dollar adjusts. But it would also disrupt international trade and be bearish for global oil prices

From opening new areas for drilling to accelerated pipeline permitting to scrapping regulations, there is no lack of speculation about what Donald Trump's energy agenda will mean for oil and gas. But the most consequential policy change on the horizon is not an energy one at all—it's rather a major overhaul of the US corporate tax code. Among the most controversial parts of the tax-reform package put forward by the House Republicans is the so-called border tax adjustment (BTA). This would effectively act as a charge on the US trade deficit by taxing imports and subsidising exports. Under the proposal, the corporate tax rate would be lowered from 35% to 20%, and the US would replace the curre