[StormChaser_5]

It's not like the tariffs are gone. It's still 10% for everyone but China. That only seems small in comparison to what was being proposed before. I wonder will EU and others wait out 90 days while negotiating or match the 10% in kind

[shaky-carrousel]

Hopefully EU will still go ahead with the tariffs. We should not be dancing at the tune of the mad king.

[jopsen]

Yes, but what's the rush here?

The EU should do what does best: make things boring.

If retaliatory tariffs is the way to go, maybe do it the boring way: considered bit by bit, no flashy announcement.

Or just make a 10 year deal on LNG so Trump can say we're paying the US money every year.

[delusional]

That seems to be the current strategy, and I happen to appreciate it.

I'm pretty mad a the US for fucking up the entire world right now, but I also realise that acting on that anger is a bad idea. I appreciate the EU having some long discussions while the emotions fade.

[kalleboo]

> The EU should do what does best: make things boring

Exactly, the absolute best thing the EU could do right now is project stability

[paulddraper]

You think that's gonna be the best outcome?

EU already had 10% tariffs on all US autos. (Though tbf most other things were near zero.)

[Aurornis]

> It's still 10% for everyone but China.

There's actually some confusion about that. They said they paused the global tariffs but didn't mention the Canada and Mexico tariffs.

If the 10% global tariff is in addition to the Canada and Mexico tariffs, the net tariff rate on those countries could be quite high. Combined with 125% tariffs on China and we would have very burdensome tariffs on 3 of our largest trading partners.

The rally is because Trump caved to pressure and is backtracking earlier claims that he wasn't going to change his policy.

[wqaatwt]

Didn’t the global “reciprocal” tariffs exempt Canada and Mexico?

[partiallypro]

Mexico and Canada are still at 25% apparently.

[mk89]

If USA keeps 10% tariffs for everyone equally, why should we interfere? Serious question.

I believe that Trump is shaking things off, but his goal is to introduce a fixed "tariff" like a soft VAT.

He is just testing (and profiting with $$$$$) what happens when you do things like 30% there, 24% there, etc. But his long term goal is a fixed tax. In that context, who are we to judge them? We also have VAT on imports.

[cwillu]

You have VAT on more or less everything, imported or not. A “VAT” that _only_ applies to imports absolutely still deserves retaliatory measures.

[mk89]

Not true. VAT is not applied on exports outside of EU.

[cwillu]

I think you misunderstood: VAT is applied to (approximately) everything a citizen of a country buys: imports and domestically produced products. Exports from a country are entirely irrelevant to whether applying VAT to imports is unfair to US imports to that country, as compared to the US charging a “VAT” on _only_ its imports.

[mk89]

VAT is applied to services too, at least here in Europe.

Now, if we were to split VAT in two: 1. tax on imports, 2. tax on whatever goods/services people in that country pay/buy, you could keep just the 2 and have free trade with other countries with zero tax. Or the opposite, do tax on imports and free trade inside your country.

The fact that VAT has always been like that (1 and 2 together), it doesn't mean it has to stay that way.

Not sure why we should care about how a country decides to apply taxation in their own country, especially if that country sets a more or less equal tax for everyone - that's understandable.

[cwillu]

   > 1. tax on imports, 2. tax on whatever goods/services people in that
   > country pay/buy, you could keep just the 2 and have free trade with
   > other countries with zero tax.

That is completely ridiculous. Why would there a VAT on, say, domestically produced pasta on the grocery shelf, while the Italian import pasta right next to it has none?

[the_gipsy]

You cannot possibly make imports VAT excempt, that's just instantly destroying your domestic market for no gain anywhere.

[tim333]

There a lot to be said for ignoring other countries tariffs and just having free trade. Hong Kong and Singapore basically did that for decades and grew fast and became wealthy. Tariffs mostly hurt the countries introducing them.

There are some exceptions. Sudden changes can be painful if you built a factory to service some market and they block the sales all of a sudden. But a 10% across the board tariff may not make it worth retaliating.

[thaumasiotes]

> Hong Kong and Singapore basically did that for decades and grew fast and became wealthy. Tariffs mostly hurt the countries introducing them.

Wouldn't you say the same thing about VAT?

[tim333]

VAT is basically just a fancy sales tax. You've got to get money for education, health and the like somehow.

HK and Singapore did have low tax and small government which probably helped them.

[thaumasiotes]

So... VAT is a better approach than tariffs because it does a lot more economic damage? That's not very compelling.

Why forgive VAT what we can't stand in tariffs?

[Zanfa]

VAT applies equally to domestic and imported products and doesn't affect the balance. Tariffs only apply to imports, thus giving domestic producers an advantage (either lower prices or higher profit margins).

[tock]

This is like saying income tax is a tariff because it stops people from buying more imported product.

[skdotdan]

Not true. VAT does way less economic damage. Tariffs introduce massive distortions in the market.

[wqaatwt]

What does VAT have to do with anything? What are you even trying to say? It applies both to domestically produced products and imports in the same way..

> Why forgive VAT what we can't stand in tariffs

Now replace VAT in that sentence with incomes tax, alcohol duty, property taxes.. makes no sense.

[rvnx]

It's not a fixed tax where there is the same rate everywhere: when you check the tariff table, you can see that there is a different rate for each item (e.g. 9.4% for Cotton Jeans) and then it says in Chapter 99 that you pay "9.4% + xxx%" where xxx is the special rate for the country.

So it's xx% that goes on top of a rate defined by the type of the item.

[michpoch]

> We also have VAT on imports.

And the US has sales tax.

VAT is paid on all products, it doesn't matter if it's domestic or imported!

[mk89]

Who cares? From the standpoint of someone selling you something, their product will be sold for 20% more (and they don't get 1 cent out of it).

[notahacker]

Importers care because unlike VAT or sales tax, it makes them x% more expensive than competitors. Consumers care because tariffs paid are in addition to sales taxes or VAT.

[michpoch]

So the US should drop the sales tax then?

[wqaatwt]

> We also have VAT on imports.

Maybe you should not repeat these nonsensical talking points?

VAT applies to everything, both imports and domestically produced goods. This reasoning makes even less sense than Trump’s ChatGPT tables…

> but his goal is to introduce a fixed "tariff" like a soft VAT.

You really don’t understand at all what VAT is?

[MaxHoppersGhost]

EU has already had tariffs on US goods for a long time.

[layer8]

Those amount to only around 3% on average.

[consp]

Per ratio closer to about 1 to 1.5 percent. It differs a bit per country due to deduction rules and additional tariffs. If you leave those out and only look at regular tariffs it is 1.39%.

[knowaveragejoe]

* The EU has had comparatively very small and targeted tariffs on US goods for a long time

Just so we're all on the same page, instead of maga talking points.

[seanmcdirmid]

Not as broadly to that extent though. Trump's tariffs are 10% of anything, so Europe will reciprocate in kind.

[rufus_foreman]

>> Trump's tariffs are 10% of anything

What percentage is VAT in Europe? Typically around 20%? Maybe Trump should enact a 10% sales tax instead of a tariff and then everyone would obviously be completely fine with it, problem solved.

[olejorgenb]

Maybe you should learn how VAT work? If you actually know better then all the economists, explain in detail how VAT is like a tariff instead of repeating this trite lie?

The world wouldn't care if he introduced a federal 10% sales tax (provided it was implemented similar to VAT, ie. non-protectionistic)

[matwood]

> repeating this trite lie

The WH repeats this lie constantly. Anytime they get pushed on the absurdity of tariffs they mention VAT like it's in anyway related. The right wing outlets then amplify and we further dumb down America.

[Hikikomori]

VAT are not tariff, we pay it on domestic products as well.

[ks6g10]

I would presume that EU products sold in the US are charged sales tax already(for those states that have it).

The difference between sales tax and tarrifs is it applies to all products within the same category irrespective of its origin.

[pjc50]

Yes, because that would apply equally to US businesses.

[matwood]

MAGA really has gotten people to believe all the VAT BS. VAT is basically a sales tax for all products. It does not typically advantage import or domestic products.

If Trump wants to implement a 10% sales tax on everything purchased in the US that would not be considered a tariff and no one would retaliate.

[yibg]

At the risk of stating the obvious, most states already have a sales tax.

[Zanfa]

Obviously other countries would be fine with Trump enacting a sales tax / VAT on everything. Why wouldn’t they be?

[rufus_foreman]

Because it would reduce US consumption of their exports. Just as a tax on consumption of up to 27% in Europe massively reduces Europe's consumption of US exports.

[michpoch]

> Just as a tax on consumption of up to 27% in Europe massively reduces Europe's consumption of US exports.

Same way it reduces the consumption of domestic goods? Seems like fair level?

[seanmcdirmid]

> Just as a tax on consumption of up to 27% in Europe massively reduces Europe's consumption of US exports.

Uhm, it also reduces consumption of locally produced goods, not just something imported into Europe. Its like...a sales tax, the only reason it is treated differently from a sales tax at all is because of its more fair rebate system.

[Zanfa]

VAT applies equally to both domestic and imported products, unlike tariffs that apply only to imports.