A day after retail executives met with President Donald Trump to voice opposition to a border-tax levy backed by House Republicans, a group funded by Koch Industries Inc. will lay out its campaign to derail the tax measure.

The plan will focus on sending the message to states that the controversial border-adjustment tax is essentially a new levy on every U.S. shopper, according to Chris Neefus, a spokesman for Americans For Prosperity. The group has chapters in 36 states, making it an influential lobbying organization that has already pledged to fight the tax.

“This would be a significant tax on consumers,” Neefus said. The group has a “tactical plan” for local voting districts, he said.

The battle over border adjustments -- which would tax U.S. businesses’ domestic sales and imports, while exempting their exports -- has divided corporate America with retailers and other net importers on one side and exporters on the other.

Supporters say the 20% levy would encourage domestic production. But opponents complain that it would just force companies to pass the increases to consumers -- potentially boosting prices for everything from food and clothing to gasoline and auto parts -- without spurring a revival of domestic manufacturing.

Targeting Republicans

Koch Industries, the private conglomerate headed by Charles and David Koch, has a long history of supporting Republicans, but now it will be targeting them. Border adjustments are part of a tax overhaul agenda supported by House Speaker Paul Ryan and House Ways and Means Committee Chairman Kevin Brady.

Trump had initially called the border tax “too complicated,” before aides have more recently said he was warming to it. It’s still unclear whether he will endorse a border levy in his tax plan.

During the meeting on February 15 with chief executive officers from chains such as Target Corp. and Gap Inc., border adjustment dominated the conversation, with several CEOs speaking out against it, according to two people familiar with the meeting who asked not to be named because it was private. The president didn’t say whether he supported the measure, but made it clear it was part of the House blueprint and his administration would be releasing its own plan in the coming weeks, the people said.

By Matt Townsend