The Survival Podcast Forum

Finance and Economics => The Money Board => Economic News, the Global Economy and all Things Monetary => Topic started by: bigbear on February 14, 2017, 12:08:20 PM

Title: EU building a case against the US border tax proposal
Post by: bigbear on February 14, 2017, 12:08:20 PM

I'm pretty sure this has a pay block...  Sorry in advance. 

Apparently the case would be tried in by the World Trade Organization.  Some general quotes:

The preliminary moves come as Republicans in Congress are working to convince President Donald Trump to back a major shake-up of the US corporate tax system that would include a new “border adjustment” system. It would see US imports subject to tax and export revenues exempted.

But he made clear the EU would be willing to act against the US whether it was related to a border tax proposal or the erection of other arbitrary trade barriers. “If somebody is behaving against our interests or against international rules in trade then we have our own mechanisms to react,” Mr Katainen said. “We have all the legal arrangements within EU, but we are also part of global arrangements like the WTO and we want to respect the global rule base when it comes to trade.”

The proposal has already set off a major lobbying battle domestically, pitting import-dependent American companies such as Walmart and major exporters such as General Electric.

US critics bristle at WTO rules that allow countries with VAT-based tax systems to offer rebates on exports while income-based systems such as the US’s cannot do the same.

Title: Re: EU building a case against the US border tax proposal
Post by: NWPilgrim on February 14, 2017, 12:22:50 PM
Well, that is EXACTLY why WTO was put into place.  To make it easy for the global corps to sell INTO the US (largest consumer) and to relocate labor to the cheapest countries.  So yes, if we want more control over our imports/exports and related taxes then we have to break away from some of these "free" trade agreements such as TPP, NAFTA, and WTO. And of course major importers to the US will fight tooth and nail to keep the US enmeshed in these treaties.  We have to decide if we are more concerned about our nation or the global corps and other countries.  We have the money (consumers) the rest of the world wants.  This is a called leverage, a good negotiating position.  We should not flush that down the toilet and pretend we are peers to third world countries.