- The Trump administration is considering imposing tariffs on imports from countries that have high tariffs on US exports.
- The administration is also considering imposing tariffs based on the value-added tax (VAT) rates of other countries.
- The author argues that a US VAT would be a better response to the EU’s VAT than tariffs.
- A US VAT would raise revenue, allowing for tax cuts on personal and corporate incomes.
- The author acknowledges that a VAT is not a legitimate trade-policy grievance.
- VATs are designed to be trade-neutral, with adjustments to ensure that foreign and domestic suppliers are treated equally.
- The author notes that other taxes may not be trade-neutral.
Source: advisorperspectives.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.
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