Trump’s VAT Complaint: Trade Tactic or Real Grievance?

• Trump claims VAT is unfair and discriminatory.
• US is one of few countries without a value-added tax.
• Trade experts see VAT complaint as a negotiating tactic.
• Trump says VAT is a double-whammy because it is added at the border on US imports, while European producers get VAT refunds when they export to the US.
• US has single-stage sales taxes, which are imposed once and generally paid by end consumers.
• VAT is levied on the value added at each stage of the supply chain.
• Import VAT is generally recoverable or offset against VAT charged further down the supply chain.
• The White House’s ‘double whammy’ argument also targets the VAT exemption for EU exports.
• EU says this is logical because it is a tax based on the place of consumption.
• Washington has sought since 1971 to create systems of income tax breaks for US exporters.

Source: reuters.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---