Strategas Research Partners told clients President Trump's comments Thursday on implementing a potential border tax with Mexico may signify he is fine with supporting the measure as part of comprehensive tax reform later.
"For all the noise of a border war and a possible trade war with Mexico, like anything else with Trump, look beneath the surface. Yesterday, Trump sent a signal that he was open to the Republican border-adjustable tax plan," said strategist Dan Clifton. "We were told repeatedly no decisions have been made by Trump regarding the border-adjustable tax system. But Trump's repudiation of the tax two weeks ago seems to be old news and the tax idea is not dead."
The border adjustable tax (BAT) is a part of the Republican House tax reform plan. It aims to generate funds to offset a large corporate tax rate reduction by taxing imports.
Clifton cited how the firm's proprietary basket of companies that support the BAT is outperforming the market as shown by the chart below:
Source: Strategas Research Partners
For investors that want to trade the prospect of the BAT being implemented, here are five companies in the Strategas BAT supporter basket.