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Canadian Prime Minister Justin Trudeau has expressed his concern over proposals for a US border adjustment tax (BAT).
Speaking at an event in Houston, Texas, Trudeau said: "Recognizing, of course, how much the Canadian economy depends on close collaboration and integration with the American economy, anything that creates impediments at the border – extra tariffs or new tariffs – is something we're concerned with."
He added: "You're going to be hurting not just the Canadian economy but the American economy as well."
The BAT proposed by House Speaker Paul Ryan would operate in a similar fashion to other countries' value-added tax systems on international trade. A tax would be imposed on imports and tax rebates would be provided on exported goods. It is intended to remove a competitive disadvantage for American exporters whose exports include embedded US sales tax. Foreign exports into the United States are zero rated under foreign countries' value-added tax regimes.
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