Staff Reports
The Trump administration is gearing up to shake up global trade with a bold announcement regarding tariffs that would make even the most ardent fiscal conservatives proudly wave their “Buy American” signs. On Thursday, the former president unveiled his administration’s plan to include foreign value-added taxes (VATs) and various non-tariff barriers into the mix of reciprocal tariffs. It seems Trump is tired of playing nice while other countries attempt to sneak in through the back door, utilizing unfair tax structures and regulatory hurdles to gain an edge over U.S. businesses.
In a recently made post on X, Trump reiterated his fiery commitment to imposing tariffs that match those imposed by foreign nations—finally ensuring fairness in a game that has long tilted in favor of countries across the pond. The inclusion of VATs in the calculations could very well be one of the smartest moves Trump has made in his ongoing mission to protect American jobs and industries. After all, while countries like those in the European Union feast on VAT refunds for their exports, U.S. companies have been left holding the bag—or in this case, the tax bill—whenever they try to sell abroad. It’s a real head-scratcher why American businesses should be at a disadvantage, and Trump seems determined to level this lopsided playing field.
The VAT system, used extensively in Europe, slaps taxes on products at various stages of production, but the irony lies in how those taxes are refunded when goods are exported. So, while European companies can effectively send their products to the U.S. with a financial safety net, U.S. firms have gotten the short end of the stick when facing similar hurdles. The former president has claimed that this tax structure is more punitive than a straightforward tariff, and rather than acquiesce to these biased practices, Trump is finally calling out these regulations for what they are.
When figuring out how much to charge in tariffs, we need to include formal tariffs, VATs, and non-tariff barriers.https://t.co/aEtstFGza8
— John Carney (@carney) February 17, 2025
But it doesn’t stop with just the endlessese VATs; the new tariff policy also targets “non-monetary trade barriers,” which Ding-Ding!—includes the kinds of obstacles that resemble the bureaucratic equivalent of a kick in the shin for American businesses trying to compete in foreign markets. Licensing rules, government subsidies that ensure a company’s success abroad, and market access restrictions are all about to be taken into consideration for tariff purposes. It’s like Trump is throwing confetti in a room filled with bureaucrats who are just learning what “fair trade” really means.
This new approach is part of a more extensive strategy by the Trump administration that endeavors to reshape U.S. trade relationships with a bit more grit than charm. Countries facing hefty tariffs will now know they have the option to mend their ways by slashing their own trade barriers. What a novel idea! United States-based production could not only get a boost but also a much-needed touch of fairness in international trade, all thanks to Trump’s unapologetic approach to tariffs. It’s as if he’s actually doing what a president should do: protect American interests, and if other countries want to play ball, they’ll have to step up their game too.
