Bank of America Merrill Lynch said the enactment of a prospective U.S. border adjustment tax could lash U.S. natural gas prices if Mexico retaliates.
A similar border tax scheme, if implemented by Mexico, could spark “a wider trade war,” the investment bank said in a research note on Friday afternoon. “It could severely hurt U.S. natural gas exports and drive down prices at the Henry Hub.”
The Henry Hub, which is located in Louisiana, sets the benchmark price for U.S. natural gas trading.
In Washington, Republican legislators’ proposals include a border adjustment tax, which intends to boost U.S. manufacturing by taxing imports while exempting U.S. business export revenues from corporate taxation.