Big in Business: Taxes, Brexit and China rescues OPEC
Trump throws cold water on border adjustment
The president-elect tipped his hand on tax reform, saying in an interview with the Wall Street Journal that he "doesn't love" border adjustment because it's "too complicated."
Border adjustment would raise taxes on corporate importers and lower them on exporters. Because the U.S. imports more than it exports, this process would raise revenue, allowing for overall rate reductions that benefit firms that locate production at home.
The president-elect hasn't proposed any alternatives, however, to an idea that's becoming increasingly popular with Congressional Republicans, precisely because border adjustment is designed to achieve the purported goals of the Trump campaign.
Theresa May will spell out Brexit
The British Prime Minister is expected to provide details today of the British government's plans for negotiating an exit from the European Union. The Pound fell by more than 1% against the dollar Monday, in anticipation that May's strategy will give up preferential treatment for British exporters in Europe for the right to block European emigration to the U.K.
What we're watching: All eyes are on Britain's prime minister, and how she will describe plans for the U.K's post-EU trade policy. Market's will also be attuned to the president-elect's reaction to the speech, and whether he further signals his plans for changes to U.S. trade or tax policy.
China comes to OPEC's rescue
Not only are the Chinese the world's largest importer of oil, but they'll need to import even more of it as its own energy exploration industry continues to pull back on domestic production.
China's oil output fell by more than 6% last year, and the The International Energy Agency predicts significant declines again this year as China's aging oil fields become less cost effective to exploit. Those declines roughly match what a country like Iraq has taken off the market, boosting the impact of those production cuts.