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Rep. Jeb Hensarling says he doesn't 'favor a border tax'

Rep. Jeb Hensarling told CNBC on Thursday that he is against one of Donald Trump's proposed policies.

When asked in an interview on CNBC's "Closing Bell" if he would support an import tariff, Hensarling said, "I do not favor a border tax, let me be clear. I do not wish to equivocate."

Hensarling, R-Tex., made his comments during a discussion about Trump going after automakers who have manufacturing plants in Mexico. Earlier on Thursday, Trump rebuked Toyota Motor on Twitter after the Japanese automaker said it had no plans to curb production in Mexico.

The president-elect has previously threatened General Motors with a border tax, something he argues will encourage companies to keep production in the United States, creating more jobs for Americans. But that tariff could inordinately impact retail companies as 95 percent of clothing and shoes sold in the U.S. are manufactured overseas. Opponents argue that this could lead to skyrocketing costs for the American consumer.

Hensarling, chairman of the House Financial Services Committee, argued the major reason jobs are moving out of the United States is because America doesn't have a competitive, simple tax code.

"I prefer carrots over sticks and I prefer tax reform over taxes," he said. "What we need to do is make America the most attractive place to site a business, to grow a business, to create a business."

Hensarling said, however, that he does "appreciate" a president "who is passionate about keeping jobs in America" and "actually wants to reform the tax code."

— CNBC's Courtney Reagan and Katie Little contributed to this report.