Nations That Charge Higher Duties or Impose Indirect Taxes Like VAT on American Goods

Boyd County Conservatives (AI Generated), 27 March 2025

TARIFFS WORK: Studies have repeatedly shown that tariffs can be an effective tool for reducing or eliminating threats to impair U.S. national security and achieving economic and strategic objectives. (source: WH Fact Sheets)

They can help protect America's industrial base and blue-collar workers. Blue-collar workers are individuals who perform manual labor or skilled trades, often in industries like construction, manufacturing, and maintenance, requiring hands-on skills and physical effort. 

(Source Investopedia)

Many nations, particularly in Europe, Asia, and South America, impose Value-Added Tax (VAT) or similar taxes on imports, which can increase the price of American exports and effectively act as a tariff.

Particularly, Europe charges higher duties or imposes indirect taxes like Value Added Tax (VAT) on American goods, with the European Union having an average VAT of 21.8%, and countries like Hungary having the highest VAT rate at 27%. Here's a more detailed explanation:

• VAT and Similar Taxes:

  Many countries, including those in Europe, Asia, and South America, use VAT or Goods and Services Tax (GST) as a primary source of revenue.

  
  

• Impact on American Exports:

  When US goods are imported into countries with VAT, the tax is levied on the value added at each stage of the supply chain, including the import stage. This can increase the final price for consumers, making US goods less competitive.

  
  

• Examples of Countries with VAT:

  • European Union: Many EU member states, such as Germany (19%), France (20%), and the UK (20%), have high VAT rates.

  • Asia: Countries like China (13%), Japan (10%), and South Korea also have VAT systems.

  • South America: Countries like Chile (19%) and Brazil also have VAT systems.

    
    

    Here's a more detailed breakdown:

    • European Union (EU): The EU generally has a high average VAT rate of 21.8%, which some argue puts American companies at a disadvantage. 

    • Hungary: Has the highest standard VAT rate in the world at 27%. 

    • Sweden: Has a standard VAT rate of 25%. 

    • Germany: Has a VAT rate of 19%. 

    • France: Has a VAT rate of 20%. 

    • Japan: Has a VAT rate of 10%. 

    • China: Has a VAT rate of 13%. 

    • United States: The US does not have a national VAT system, but instead relies on a patchwork of sales taxes administered by US states and local jurisdictions. US is an Exception due to the fact the US is one of the few countries that does not have a federal VAT system.

    • Federal Excise Taxes: The US also charges federal excise taxes on certain goods, such as fuel, alcohol, and tobacco products. 

      
      

• Tariffs vs. VAT:

  While tariffs are taxes specifically on imports, VAT is a tax on the value added at each stage of the supply chain, including imports.

• Reciprocal Tariffs:

  In response to US tariffs, some countries have imposed their own tariffs on US exports, further increasing the price of US goods.

• Examples of countries that have imposed tariffs on US exports in response to US tariffs:

  Canada, Mexico, China, the EU,India, Russia, and Turkey.

• Import Tariffs: Import tariffs, or duties, are taxes levied by governments on the value of imported products, including freight and insurance.