Trump's treasury pick: 'No across-the-board border tax'

Senate grills Treasury pick on foreclosure record
Senate grills Treasury pick on foreclosure record

Donald Trump's choice for treasury secretary, Steven Mnuchin, said Thursday that the incoming Trump administration doesn't plan to quickly impose an across the board 35% tax on items manufactured in other countries.

Trump has pledged repeatedly to levy a border tax on items such as cars that are manufactured in Mexico and sold in the U.S., in an effort to keep jobs from leaving the country.

Mnuchin was asked about Trump's plans for a border tax during his confirmation hearing before the Senate Finance committee.

"He hasn't suggested a border tax," Mnuchin responded. "What he's suggested is that for certain companies that move jobs ... that there may be repercussions to that. He has not suggested in anyway an across the board, 35% border tax."

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In response to a follow-up question, Mnuchin added, "He has in no way contemplated a broad 35% border tax. That couldn't be further from anything he'd possibly consider."

Later, Mnuchin said that there could be a targeted tax aimed at companies that move jobs out of the U.S. But even then he was noncommittal. "I think that that's something that needs to be looked at," he said. But he then cautioned, "I don't think that that's a plan that's going into action."

Trump repeatedly cited the border tax threat during his campaign, vowing quick action.

In December Trump vowed on Twitter that "Any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will see its product back into the U.S. without retribution or consequence is WRONG! There will be a tax on our soon to be strong border of 35% for these companies wanting to sell their product, cars, A.C. units etc., back across the border. This tax will make leaving financially difficult, but these companies are able to move between all 50 states, with no tax or tariff being charged. Please be forewarned prior to making a very expensive mistake!"

Just this month he warned several automakers that they will face a big border tax if they go ahead with plans to build cars in Mexico.

"General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border," Trump tweeted on Jan 3. "Make in U.S.A. or pay big border tax!"

Two days later, he tweeted, "Toyota Motor said [it] will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax."

Trump's transition press office did not respond to a request for comment about how Mnuchin's testimony squares with Trump's position.

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In fact, under current law, it's likely illegal to impose a tax or tariff on an individual company, according to Gary Clyde Hufbauer, a senior fellow at the Peterson Institute for International Economics.

"I'm very skeptical that that can be done unless Congress passes legislation that gives the president the authority to do just that," he said.

-- CNNMoney's Jeanne Sahadi contributed to this report.

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