Fertilizer maker CF Industries cheers possible U.S. border tax
(Reuters) - U.S.-based CF Industries Holdings Inc (>> CF Industries Holdings, Inc.), the third-largest global nitrogen fertilizer producer, would welcome a U.S. border tax on imports, as it would mirror conditions the company already faces selling into other markets, Chief Executive Tony Will said on Thursday.
A House Republican plan would cut corporate income tax to 20 percent from 35 percent, exclude export revenue from taxable income and may impose a 20 percent tax on imports.
The tax would hit nitrogen shipments by Norway-based Yara International ASA (>> Yara International ASA) and Chinese producers, along with CF's shipments from its Canadian plants.
"Our focus has really just been on levelling the playing field," Will said in an interview.
Earlier, Will told analysts that a border tax and drop in corporate taxes would help CF compete, as it already pays import taxes or tariffs on products it sells to Europe and China.
The United States is a net importer of nitrogen fertilizer, much of it coming from China, as well as of potash from Canada, Russia and elsewhere. New U.S. nitrogen fertilizer capacity owned by CF and others is ramping up this year.
But Canada-based Agrium Inc (>> Agrium Inc.), which also produces fertilizer in the United States, thinks a U.S. border tax on crop nutrients would raise costs for U.S. farmers and reduce their competitiveness, said spokesman Richard Downey.
Companies that rely heavily on imports, such as retailers, automakers and refiners, say a border tax will outweigh the benefit of a lower headline corporate tax.
CF reported a bigger-than-expected loss after the market closed on Wednesday, but said it expects prices in North America to improve through the first half of the year.
Its shares were down 0.6 percent at $34.27 on Thursday morning.
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Matthew Lewis)
By Rod Nickel