U.S. Congressional leaders announced that they have scrap a border tax on incoming goods, including cars, as part of a larger tax overhaul proposal currently under discussion.

"While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform," U.S. House Speaker Paul Ryan said in a statement.

Auto dealers applauded the decision in a statement. The American International Automobile Dealers Association President Cody Lusk said in a statement "the border adjustment tax would have driven up costs on everyday goods and put Americans out of work. Now that it's off the table, and the business community is no longer divided by this issue, we can now get back to work on supporting this important legislation."

The AIADA said the tax would have added, on average, about US$ 2,000 to the cost of all cars sold in the U.S., regardless of their origin. No vehicles are made with 100 percent American parts, the group said, and even cars made by domestic automakers would have added thousands of dollars to the prices of current models.

MexicoNow

Related News

- Border tax, NAFTA exit could harm U.S. auto industry, says study by BCG

- Cummins CEO defends NAFTA before Congress Committee

- US makes lower trade deficit a priority in NAFTA renegotiation