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Comment by psychlops

Thank you for clarifying, it did not occur to me that member states paid VATs. From outside the EU, the VAT is no different than a tariff. They are both taxes which inflate the cost to do business. From your example, I think it's fair to sum the state taxes into US tariffs for comparison.

You did send me down a research rabbit hole trying to better understand VAT. It's complex so I picked a car as a test product. As a comparison, I found that to import a car from Germany into the US it costs 2.5% of the cars value. North Carolina charges an additional 3% state tax on it for a grand total of 5.5%.

To import the same German car into France the cost is (cough) 20%.

To import an American car into France the same 20% is paid plus a 10% import fee for a total of 30%. I'm sure I'm glazing over many, many smaller charges/exemptions in these examples.

To answer your question about protection using the numbers above, companies outside the eu that want to compete at an equal price with an equivalent German car would need to do so with a product that is at least 10% cheaper.

parent psychlops 1 year ago

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