In a post on X, Mr. Trump reiterated his commitment to reciprocal tariffs, stating that the U.S. will impose duties equivalent to those levied by other countries. He said the policy will now account for VATs and other trade barriers that act as indirect tariffs.
“For purposes of this United States Policy, we will consider Countries that use the VAT System, which is far more punitive than a Tariff, to be similar to that of a Tariff,” he wrote. He also stated that non-monetary trade barriers, such as regulations that restrict U.S. businesses from operating in foreign markets, would be factored into tariff calculations.
VATs, used extensively in Europe and many other countries, apply taxes at multiple stages of production but are typically refunded on exports. This means that European companies exporting products to the U.S. get refunds on VATs, a significant financial incentive for exports. Since the U.S. does not have a VAT scheme, there’s no “export bonus” available to U.S. companies and U.S. products face a VAT when sold in Europe. U.S. officials have long argued that this structure puts American businesses at a disadvantage by allowing foreign companies to sell their goods abroad with an effective tax rebate, while U.S. exports remain subject to foreign VATs.
Beyond tax policies, Mr. Trump’s directive also targets what he termed “nonmonetary trade barriers,” which could include licensing rules, government subsidies, and market access restrictions that make it more difficult for American goods and services to compete overseas. He indicated that the administration would quantify these barriers and apply tariffs accordingly.
The expansion of the tariff policy follows Mr. Trump’s broader effort to reshape U.S. trade relationships by leveraging import duties as a negotiating tool. Under the new plan, countries that wish to avoid U.S. tariffs would have the option to reduce or eliminate their own trade barriers.
The administration maintains that the policy will encourage more domestic production and bring greater fairness to international trade.
“There are no Tariffs if you manufacture or build your product in the United States,” Trump said in his post.
Breitbart News
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