Trump announces tariffs on EU in retaliation to VAT
The president has initiated a process to establish reciprocal tariffs for all, but plans to apply them specifically to target any perceived fiscal, regulatory or commercial barrier
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Did this muppet really say he thinks VAT is a tariff?
Can't make this shit up!
If vat is a tariff, then US sales tax is a tariff as well. This means we are already at tariff wars so no need to change anything.
Isnt a sales tax and VAT literally the same thing? Both sales taxes and European VAT are examples of VAT. (I hope theres no differences im missing).
More importantly, VAT usually applies to all products, regardless of origin. And its not that big of a leap now, from calling VAT a tarrif, to call any form of taxes tariffs (incl. income tax).
Yes. Typically the VAT is due along the entire supply chain. So while every business has to declare and pay VAT for its sales, it can reduce its obligations by the VAT it already paid on the things it bought. So your 20% VAT (example value) is not in every step of the chain, but reflects the taxation of the entire chain.
Now obviously, if you import something, the importer cannot reduce his VAT obligations in for example Germany, because his price included the VAT that the exporter paid in the US.
This is already a huge problem inside the EU, where things ended effectively with most cross border businesses not being subject to VAT. So for inside the EU the exporter does not declare VAT on his export and the importer cannot reduce his VAT obligations by the VAT that wasn't paid.
So in practice the VAT does encourage to buy a product inside the EU instead of from the US, if the price without taxes is the same. This goes both ways though.
A similar instrument to the EU one could be negotiated with the US, so that it makes cross border trade more attractive, but we know that the US has no interest in holding up its side of that bargain. Also it does come with a can of worms, as these systems often are subject to exploitation. https://en.wikipedia.org/wiki/Missing_trader_fraud
The difference is only in how it is collected. Sales tax is only applied in the final sales, whereas VAT is applied at every step.
Collected and subsequently reimbursed, such that VAT is only in effect being paid at the point of the final sale.
This is not entirely accurate but it's accurate enough to be useful for this conversation
"VAT - Vaccinated Antifa Tariff," Musk, probably
are you still shocked after - checks note - 8 years?
I try not to follow US politics too closely, so... yes, a little, every time shit like this makes it to world news.
You can't make most of his shit up.