“Problems worthy of attacks prove their worth by hitting back.”—Adam Smith
This past Thursday, President Trump met with CEOs of major U.S. airlines and promised them a “phenomenal” tax policy that would be rolled out in a few weeks. With this statement, stocks, which had been limping a bit as some investors began to doubt the future of “the Trump rally”, caught a nice bid, along with the U.S. dollar (USD), at the expense of Treasury notes, as the ten-year rose from 2.33% to 2.44%. When the new president focuses on the economy, he focuses like a laser beam on global trade, looking to significantly reduce trade deficits with our major trading partners. With this in mind, many believe that the Trump administration will introduce a corporate tax policy that incorporates a “border adjustment tax” (BAT), where corporations are taxed at a higher rate for domestic sales and imports and not taxed on exports or sales made in overseas operations.