Infographic: Tariffs and VATs in Global Trade
Infographic: Tariffs and VATs in Global Trade
Manufacturers are grappling with the impact of new tariffs, which will make the U.S. an international outlier.
More than 100 years ago, tariffs were a major policy tool for the U.S. federal government, as well as the governments of other nations. Often, the goal of tariffs was to support domestic manufacturing sectors, while revenue was a secondary consideration. In 2025, the newly returned Trump Administration is determined to use tariffs to not only support U.S. manufacturers as well as provide enough income to cut other taxes.
One point of evidence the Trump Administration uses to support its claim that the U.S. is entitled to raise tariffs as high as 20 percent is the widespread use of value-added taxes, or VATs. These taxes are levied on goods and services at every point in the supply chain, so imports are assessed with the full force of the VAT as soon as they are purchased by an importer.
Tariff and VAT rates vary widely across the globe. Are there lessons in that pattern?
One point of evidence the Trump Administration uses to support its claim that the U.S. is entitled to raise tariffs as high as 20 percent is the widespread use of value-added taxes, or VATs. These taxes are levied on goods and services at every point in the supply chain, so imports are assessed with the full force of the VAT as soon as they are purchased by an importer.
Tariff and VAT rates vary widely across the globe. Are there lessons in that pattern?
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