Trade-Exposed Companies Contain Their Relief As GOP Scraps Border Adjustment Tax Plan

Much ado about nothing, part two.

After sending ripples of fear through trade-exposed textile and apparel companies, Republicans dropped the controversial border adjustment tariffs from tax reform blueprints Thursday.

"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," GOP House, Senate and White House leaders said in a joint statement.

The original plan was intended to raise revenue through the taxing of imports but not exports, and companies generating a significant portion of revenue overseas were expected to suffer.

But some expected losers, like Gildan Activewear Inc (USA) GIL, claimed business models buffered against the caprices of policy, even though they had been "watching attentively the various developments."

"While the most recent news may seem like welcome news regarding our specific company, we have always been of the opinion that we are well positioned to be successful by leveraging our vertically-integrated manufacturing model, with diversified manufacturing operations, and our large global scale," Garry Bell, Gildan vice president of corporate marketing and communications, told Benzinga. "This has really not changed with the most recent developments. There remains a lot of complexity to the ongoing trade discussions but once again we feel we have built a good business model which will allow us to be successful."

The Republicans will move forward with focus redirected toward a joint tax plan, whose details and business implications remain largely unknown. Thursday’s joint statement vaguely delineated a simplified tax code, lowered business rates and alleviated burdens on the middle class.

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