Recently I had the opportunity to tell our Vivacity Sportswear story on how the proposed legislation by House Republicans in Congress regarding a border adjustment tax (BAT) on imports would negatively affect our business.
This proposed act would add an additional 20-30% tax on any component or finished product imported into the US. The flip side to this legislation is that all US exports would not be taxed.
I understand how this may initially sound like this tax proposal will safeguard American jobs, but it’s much more complicated than this tax makes it out to be.
As a business owner working with a vast network of suppliers and contractors in the US and abroad, I have realized that we are truly a global economy. In Vivacity’s case for example, we are sourcing some incredible performance fabrics that are mostly manufactured in Asia. Our beautiful Swarovski crystal zippers are handcrafted in a small town in Austria.
So even though we develop our designs and sew many of our garments in Southern California, we are still, directly or indirectly, importing materials.
So if our imported fabrics and zippers and other components are now going to be at least 20 to 30% higher under this tax, do we just pass along this charge to our customers? Does everyone get penalized? Will customers just stop buying? So then what happens to our vendors and suppliers?
National Retail Federation (NRF) has been working with businesses like Vivacity who feel strongly about how this border adjustment tax proposal will hurt our economy. I, along with business owners Erin Calvo-Bacci, owner of CB Stuffer, and Dave Ratner of Dave’s Soda & Pet City , spent a day outside of Washington DC filming our stories.
It was so wonderful to work with these amazing business owners as well as the NRF team.
You can see the interview here: https://nrf.com/news/small-retailers-the-bat-is-going-kill-us