Walmart's former CEO and Target's CEO clash over one of Trump's key policies — and only one of them can be right (TGT, WMT)

"Under the new border adjustment tax, American families — your constituents — would pay more so many multinational corporations can pay even less," Target CEO Brian Cornell testified in a House of Representatives committee meeting on Tuesday.

Cornell called the US's current tax code "broken." However, he said the proposed border adjustment tax, which taxes imports 20% while exempting exports, would only hurt American retailers and shoppers. According to Cornell, the border adjustment tax would more than double the retailer's tax rate to 75%, leaving Target unable to invest in hiring workers and opening new stores in the US.

"It's simple math," Cornell said. "If the government takes nearly four out of every five dollars we make... there's no capital to invest and no prospects for growth. And that matters a lot. Both to us and to the American economy. Instead of investing and creating American jobs, we’d be pushed in the other direction."

Meanwhile, former Walmart CEO William Simon spoke in support of the border tax. Simon, who stepped down from his position at Walmart in 2014, said that a border adjustment tax could help bring manufacturing jobs back to the US and contribute to the health of the American retail industry in the long term, if properly implemented over an extended period of time.

"Once the middle-class jobs start to return to the country, and the wage increases that would come with that, retail will start to see a new sort of resurgence and a period of growth," Simon said, noting he understands Cornell and other retailer executives' concerns. "Right now the wind is coming out of retail sales because the wind is coming out of the middle class."

The CEO of food processing company ADM, Juan Luciano, also spoke out against the border tax in the committee meeting. Industry trade group National Retail Federation has strongly opposed a border tax, saying it would result in higher prices for American shoppers.

The border tax has fallen out of the limelight in recent months, as retailers have lobbied against the tax and the provision has failed to gain the necessary support in Senate. Lloyd Doggett, a Democratic congressman from Texas, said in Tuesday's committee meeting that the border adjustment tax, which he opposes, is currently on "life support."