He really doesn't seem to understand how tarrifs work. Remember when he said he wanted America to have an External Revenue Service? That's not how tarrifs work.
So tariffs are no longer (just) about tariffs? If Trump finds that there’s been a non-monetary barrier, or that a US business is prevented from operating, he’ll responde with whatever measures he feels like deploying.
Wonder if EU regs - say, of tech bros’ companies - will fit this definition.
It surprised me that, of all things, they had no plans for how to do tariffs. I thought that was one thing that they'd have someone capable like Lighthizer on.
Anyone competent knows that tariffs are a terrible idea no matter how you implement them, but Donald doesn't want to hear that, so anyone he lets work on the details will necessarily be grossly incompetent.
I would like to point out that basically every country in the world uses VAT, aside from the US and a handful of mostly dictatorships and failed states (like Somalia or North Korea). This is tantamount to declare economic war on the whole world.
Yeah that's fair. I'm just talking from a European perspective about how fucking horribly it's going to end if he tries to intervene in domestic politics through economic coercion. (tarriffs are the mildest possible retaliatory tool available)
Oh yeah, for sure. By and large, we already aren't huge fans of Mr. Trump over here. This will not help his case and has the potential to radicalize many governments against him.
Like this will provoke a trade war, and it will be enough to activate the ACI if the EU deems the collateral damage worth it.
This can be read as an intervention in domestic politics of EU member states by trying to coerce them into changing their tax structure and get rid of VAT.
What I'm reading is the effect should be same-ish in the end, with VAT tying in some additional capital in the time between payment and rebate - with all of the tax cost ultimately landing on the end buyer?
How does it work with goods imported from non-VAT countries? All the initial VAT stays in EU?
Why not? If you put VAT on everything, but then make it 0 for domestic companies (based on some quirky definition that only domestic manufactured can satisfy)? I have not investigated whether this is exactly what is happening, but based on what trumps says it certainly appears to be.
I guess its hard to talk substance without seeing exact claims (and trump is vague on details, as usual), but theoretically speaking if I were to impose sneaky tariffs VAT would certainly be one way of doing it.
Yes, of course. but there are exemptions and different rates. Look it up. I'm not saying it IS used in place of tariff, I'm just saying it CAN, and that's what it seems trump implies here.
Every single country in the world uses VAT except the US and like Somalia. If they use it in the way you describe then it counts toward his concept of “unfair”, but there simply is no way that’s what he means or that a significant number of them use it in this way. Lmk if you find a single instance
So VAT (value added tax) is a Sales Tax. Trump kept lying that "other countries will pay the tariffs", but we all KNOW who pays Sales Taxes - the buyer. Trump is thus ADMITTING THAT THE TARIFFS ARE A SALES TAX, or else it would make no sense to tie them to VAT.
So basically if people in the US buy something from a country that puts a sales tax on it, the US is going to also put the same amount of sales tax on it?
And we also know that Sales Taxes are regressive - the poor pay more, the rich pay less. This is really the entire reason for trying to shift tax revenue from income taxes to tariffs.
Comments
Ohhhhhhh…
Wonder if EU regs - say, of tech bros’ companies - will fit this definition.
Bold strat.
Reads as an attempt to force countries to get rid of VAT, to get rid of us tarriffs.
Aside from how stupid it is.
This is a surefire way to piss off every single EU-27 member.
This can be read as an intervention in domestic politics of EU member states by trying to coerce them into changing their tax structure and get rid of VAT.
How does it work with goods imported from non-VAT countries? All the initial VAT stays in EU?
VAT is charged on all imports as if they were domestic goods, while rebated on all exports.
At least that’s my reading.