Trump's latest move on tariffs is to impose a 25 per cent tariff on all auto imports, including parts. This article makes the case with great clarity.
The problem for US exports to the EU is that these are subject to VAT. Exports of EU countries, including from one EU country to another, get a VAT rebate. EU exports to the US would, of course, qualifyi for the VAT rebate. VAT is generally 21 per cent. American car makers pay domestic tax and a further VAT on exports to US. The author estimates that, to offset the disadvantage American exporters face in the EU, a tariff of 25 per cent is in order.
That's exactly what Trump is imposing. Whether a like tariff can be justified on exports from Asia and North America is not clear. But it certainly fits in with Trump's grand plan to bring manufacturing back to the US.
Trump posted on Social Truth:
For years we have been ripped off by very country in the world, friend or foe. But those days are over-Ameica First!!
He has a point at least where the EU is concerned.
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