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The European Vat Is Not a Discriminatory Tax Against US Exports
The Trump administration appears to be moving in a “reciprocal” policy direction despite the significant negative economic consequences for American consumers of across-the-board tariffs on goods coming into the US. However, the EU’s VAT system should not be used as a justification for retaliatory tariffs.
However, when discussing trade with the EU specifically, White House deputy chief of staff, Stephen Miller, added a new policy grievance to the mix: value-added taxes (VAT). Rather than focus on raising tariffs, which i ncrease the cost of operating in the United States and reduce total output and productivity, fiscal policy reforms to improve the structure of the federal income tax system can better boost competitiveness of the US manufacturing sector. The Trump administration appears to be moving in a “reciprocal” policy direction despite the significant negative economic consequences for American consumers of across-the-board tariffs on goods coming into the US.
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