(04-07-2025, 04:06 PM)Jag149 Wrote:

(04-07-2025, 01:19 PM)The Drifter Wrote: Taiwan has just agreed to drop ALL tariffs on the United States, joining India, Israel, Vietnam, and Cambodia, who also intend to zero out their tariffs.
Per WH

Positive signs unless China is looking to use it's neighbors to trans ship product to the US. Hopefully the agreement allows for that to be verified.  The EU wants zero to zero tariffs, but want to keep the 20% extra they currently charge. lol

I did not believe this when I first read it, cuz in my world you are the only one saying this. 
But I looked into it and you're mostly right.  The VAT on its face is just a multi-level sales tax that applies to anything, foreign or domestic.  Doesn't sound at all like a tariff.  But the Europeans, and some others, do exempt or refund the VAT on exports.  
If a factory takes steel and aluminum and makes car parts, the VAT is charged on their revenue minus their cost of goods.  They sell those car parts to a car manufacturer, and then when the car is assembled a VAT would be charged on the revenue minus cost of goods for the car manufacturer,
UNLESS
The car is exported to another market.  
That's definitely a subsidy on exports, and it's totally fair to respond to that with tariffs until they fix it.  Our labor costs are higher in part because our workers pay higher total income, sales, and property taxes, because we have no VAT.
Even though a 20% VAT with an export exemption causes less distortion than a 20% tariff, it's still an impact and it is fair to retaliate.
All that said, in the US we have pretty huge subsidies on certain exports, especially agriculture, and many other countries have tolerated that for a long time even though they hate it. That may change.

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