The EU, which the US president has described as "absolutely brutal on trade," faces tailored tariffs intended to offset not only existing levies on US products, but also non-tariff barriers such as subsidies, taxes, and regulations.
In this context, the European VAT has been singled out as a discriminatory trade practice and a "hidden tariff" that, according to the US administration, has favored German car brands at the expense of American ones.
"There's a reason Germany sells more cars than we sell them, and it's not because of the quality of American manufacturing or design. It's simply because of unfair trade practices, and that's lethal. It's a hidden tariff," the president told reporters.
In addition to VAT, the digital services tax, known as the 'Google Tax', is also under scrutiny. While Canada and France are the main targets, other European countries, including Spain, that apply this tax could be affected.
A senior administration official also mentioned Japan and South Korea as nations the White House believes are benefiting from their trade relationship with the world's leading power.
The memorandum signed by the president sets out the roadmap for the implementation of these tariffs, although an executive order has not yet been issued, leaving room for negotiation. The study of the measures is expected to be ready by April, after which final decisions will be made.
“I have decided that, for reasons of fairness, I will impose reciprocal tariffs, which means that whatever a country makes the U.S. pay, we will charge them the same amount, no more, no less,” he stated. “Everyone has taken advantage of the U.S., and we have paid a high price for it. The United States has helped many countries over the years at great financial cost. Now is the time for those countries to remember what we have done for them and treat us fairly,” he added.
VAT, in detail
EU regulations stipulate that VAT is levied on the import of goods, although there are suspension regimes for goods destined for other EU countries. The minimum general rate is 15%, with the possibility of reduced rates (not less than 5%) for certain goods and services.
The US president has criticised, for example, the fact that Europe charges 10% VAT on cars imported from the United States, while only 2,5% is applied on cars imported from the United States.
Pre-existing Trade Tensions
This announcement adds to already existing trade tensions. Recently, tariffs on Mexico and Canada were postponed following an agreement on border control, but an additional 10% tariff was imposed on China, prompting retaliation from Beijing. He also signed, some time ago, two executive orders to apply 25% tariffs on imports of aluminum and steel.
Potential Impact in Spain
Although Spain's trade relationship with the United States is in deficit (Spain imports more than it exports), US investment in Spain is not particularly high in the defense sector. Nevertheless, Spain, as an EU member and a country that applies the 'Google Tax', could be affected by these reciprocal tariffs. Spanish exports to the United States, which include products such as olive oil, wine, and automotive components, could suffer a negative impact if these tariffs materialize. Furthermore, the uncertainty generated by this trade policy could affect investment and economic growth globally, which would have indirect consequences for Spain.
Any questions about this news?
Talk to Coexia, the AI of the foreign trade
