Comment by arlort
8 days ago
Others pointed out that the tariff rate they are pointing to is actually just calculated based on trade imbalance. So the logic is that they have a number they want to get to and are throwing around terms that their constituents don't understand to make it sound reasonable
VAT is not a tariff, no one reasonable thinks it's a tariff but the US doesn't use the term VAT so enough people won't second guess it if trump says it's an tax on american goods
VAT is effectively a tariff though, because it disincentivizes import/trade with the US (and other foreign countries). Since the US has no VAT, it's leading to unfair competition.
Good write up here https://www.economicforces.xyz/p/stop-saying-a-value-added-t... about how VAT doesn't alter the levelness of the playing field re imports and exports
VAT complicates the business environment for US companies operating in the EU, and it takes a major chunk of their margins. US doesn't have VAT and has a significantly easier business environment for EU businesses to operate in - leading to an unbalanced playing field.
VAT is just one component though. Remember that US largely subsidizes and sponsors the defense of EU, Ukraine, Taiwan, Japan, etc - but those countries have been giving less and less back, over the past years.
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No, VAT is not a tariff. It applies to all goods sold, not only imported ones.
VAT applies equally to domestic and foreign companies. It's a tax.
Tariffs and barriers to trade are measures meant to incentivize production in the country imposing them. That's what free trade is meant to get rid of, that's why Trump is so keen on tariffs and likes them
If a company moved a production line to within the EU from outside because of VAT they'd still have to pay the same exact amount of VAT as they did before. It's just not an incentive in that sense
Repeating this does not lead to understanding. Give a concrete example of how the rules applies which show your point...
US has sales taxes.
If anything, VAT incentivizes sustainable economy by making production more expensive than reuse.
Bullshit. VAT is levied on domestic and imported goods, from the consumer's point of view there is absolutely no difference.