Trump, Trade, and the U.S. Border Tax

The video discusses the implications of a border tax, comparing President Trump's tariff approach with House Speaker Ryan's comprehensive corporate tax reform. It explores the impact on exporters and importers, the potential economic and dollar consequences, and the difference between theoretical and practical outcomes. The video also provides insights into investment strategies in response to these changes.

What is the primary difference between a tariff and the border tax reform proposed by House Speaker Ryan?

• A tariff is a temporary measure, while Ryan's reform is part of a comprehensive tax code change.

• A tariff is a tax on exports, while Ryan's reform is a tax on imports.

• A tariff is a tax on imports, while Ryan's reform is a tax on exports.

• A tariff is a tax on domestic goods, while Ryan's reform is a tax on foreign goods.

How might a simple tariff on the border affect the economy compared to a structural tax reform?

• It would likely lead to more inflation than growth.

• It would have no impact on inflation or growth.

• It would lead to a decrease in both inflation and growth.

• It would likely lead to more growth than inflation.

What is a potential short-term consequence of the border tax on economic activity?

• Decreased inflation

• Immediate economic growth

• Adverse effects on activity and inflation

• Increased foreign investment

What investment strategy is suggested in response to the border tax and potential dollar rally?

• Avoid all stock investments

• Invest heavily in emerging markets

• Underweight duration and long dollar bias

• Overweight duration and short dollar bias

What factor is important in determining the asset market response to the border tax?

• The presence of fiscal stimulus

• The strength of the Mexican peso

• The level of synchronized global growth

• The rate of inflation