NEW ORLEANS -- The incoming chairman of the American International Automobile Dealers Association said the group will fight Republican plans to impose a “border adjustment tax.”
Paul Ritchie, president of Hagerstown Honda and Kia in Maryland, said the tax would be harmful to dealers and automakers of foreign brands who directly employ more than 125,000 Americans.
“This tax will absolutely devastate both dealers and manufacturers, and many members of Congress have no idea what they are being asked to vote for,” he told AIADA members and auto executives attending a luncheon.
His comments came Sunday on the last day of the National Automobile Dealers Association convention in New Orleans.
Ritchie said his group would work “with everything we have in Washington, D.C., to promote dealer interests, protect global trade and to fight against the devastating border adjustment tax.”
The so-called BAT would punish foreign imports -- and reward U.S. exports -- through changes in the tax code. Opponents say that consumers would ultimately pay the tax in the form of higher prices for everything from clothing to autos, including from U.S. brands.
It is favored by some Republican leaders in Washington over imposing tariffs or unwinding trade deals that President Donald Trump had supported during his campaign.
Since taking office Jan. 20, Trump has gone back and forth on whether he prefers a border adjustment tax or some other measures to close the U.S. trade deficit and perhaps to fund a wall on the U.S.-Mexico border.
Ritchie said his group was joining with other manufacturing and retail organizations to lobby against the tax.
He noted that foreign automakers have 36 plants in 16 U.S. states. They represent nearly half of all U.S. vehicle production, according to an AIADA fact sheet.
Jim Lentz, CEO of Toyota Motor North America, said in a separate meeting with reporters that a border tax would raise the price of cars and light trucks in the U.S., depress sales and lead to less employment in the auto industry.
He noted the Toyota Camry, which has the highest American-made content of any car sold in the U.S. at 75 percent, could cost roughly $1,000 more if a border tax were imposed on the 25 percent of its content that is imported.