[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?

[mk89]

It's how the EU today works BTW. In german shops you can buy locally produced pasta or imported Italian pasta (no import tax), both with 7% vat on it. Now you can claim "but this is EU...".

Why can't this free trade be done with individual countries for specific products then?

[mk89]

To allow free trade of certain goods which your country needs more.

This is why tariffs are much more flexible, because they allow you to, let's say, trade oil at a cheaper price, while pasta (widely produced in europe) at a higher price.

[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.

[thaumasiotes]

It's like saying income taxes and tariffs do their damage in similar ways. They do. Income taxes are another thing that mostly just hurts the country introducing them.

[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?