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Comment by ajross | Hacker News Reader

This is a retcon attempt. While sure, tariffs are just a tax like any other and can be applied to lots of different policy aims, and don't have to be the end of the world...

None of these arguments were presented in a reasonable way, with numbers, ahead of a policy decision that made a considered attempt to find an optimal balance.

No, we elected an administration that had been shouting "Tariffs!" during the campaign, then enacted "Tariffs!" once in office, then engaged in a quite frankly pathetic flurry of increases/decreases/suspensions/delays to try to fix the critical problems being introduced by the "Tariffs!". Most of which have been to other nations' benefit, even.

It's a bit much to look back after three months of this madness and try to pretend how reasonable it was all along. We're still in the madness (Q2/Q3 numbers haven't landed yet to show actual effects, it's going to be a rocky year, folks).

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The administration still routinely presents VAT as a tariff. To think there is any real policy thought behind the actions is akin to looking for meaning in the clouds.

"Clouds are simply a negotiating tactic"

To some extent, they seem interchangeable.

For instance, any time System76 is brought up for Europeans, VAT is immediately mentioned, along with why they don't have a European distribution center.

Why would opening a European distribution center be relevant if you have to pay the same VAT either way?

A few examples:

https://ubuntuforums.org/showthread.php?t=2204089

https://www.reddit.com/r/System76/comments/1c9djrj/taxes_on_...

The VAT is akin to a sales tax. It's paid regardless of where the item is manufactured or distributed from (and mostly regardless of the item). The US typically applies between 5-10% sales tax on most items. I have no idea why someone from System76 would think it's relevant to have an EU distribution center, but it wouldn't change the VAT.

BTW, it's not just the EU that wants you to pay the sales tax when bringing items across the border, but the US also. It just so happens that it's rarely if ever enforced.

EDIT I should add that the key difference of the VAT and tariff is that VAT is not made to advantage one product over another. It's simply a sales tax on nearly all products, just like the US sales taxes.

> have no idea why someone from System76 would think it's relevant to have an EU distribution center, but it wouldn't change the VAT.

It seems to be the customers asking for one, not System76. They were planning to open one, though.

> VAT is not made to advantage one product over another.

Like sales tax, there are different (and often zero) rates depending on product (same link as before)

>> VAT is not made to advantage one product over another.

> Like sales tax, there are different (and often zero) rates depending on product (same link as before)

But those different rates depend on the product category, not the product manufacturer or place of origin. The whole point of tariffs is to base rates on place of origin.

> But those different rates depend on the product category, not the product manufacturer or place of origin.

They do, though:

https://stripe.com/en-ch/resources/more/import-tax-germany

No, they don't. As noted in the link you provided the VAT rate on an import sale is the same as the VAT rate for a non-import sale.

There is a whole table with different numbers that vary by EU country. Look for "List of (import) VAT rates in EU countries"

That's an overview of the VAT in different countries, nothing to do with origins.

Aaah. That makes sense. Thanks!

No, they don't. You have at least two VAT rates, and my country has four:

- Staple food (rice, basically? Probably flour too) as well as healthcare: 0%.

Food and common, staple products (soap, condoms, probably other), some cultural products (books, theater tickets, probably other), electricity, water: reduced rate (5.5%)

'vacation' rate: camping bookings, alternative healthcare, zoo, movies, restaurants (10%).

Everything else is 20%, whatever the brand or the producer. I know because I actually checked my transaction tickets for a long time (and my first journey b was writing an OCR to automatically analyze those tickets to ask for VAT reimbursement)

EU distribution center is a proxy for "seller handles VAT and it wont be my problem as a customer to deal with the border authorities or the shipping company that in turn is dealing with the border authorities". VAT and tariffs get paid either way, but as a consumer I very much like it if its your problem, not mine, and "we ship from an EU location" is a very obvious way of ensuring that.

Why does it matter if it's the same number as a line item on the invoice vs you pay it to UPS upon receipt? It's the same price.

> you pay it to UPS upon receipt?

So now I gotta be home 100% to receive the package, instead of it getting it dropped off at a neighbors if I happen to be out/at work/...? And I hope they picked a shipping company that takes card/allows online payments and not someone who expects me to pay in exact cash.

And that's the happy path where everything worked correctly, and not one where something in the paperwork is wrong or got messed up and now you get to try figure out what exact proof the shipping company wants to release your package/believe that they got the amount wrong/... Or it gets shipped in a way where it ends up stuck with actual customs and you get to deal with them. If a seller has their shit in order it's relatively unlikely to happen, but well, random small-ish companies not necessarily do, and if it goes wrong its really annoying.

+ of course if the seller has an actual legal presence here it makes it clear consumer rights as I expect them apply.

I'm not someone who absolutely won't order from abroad if I want something, but a local source or a known distributor just avoids a whole category of potential issues. And computers are the kind of high-value item where people really want to avoid them (and some of the simplifications aren't available, e.g. I think the most straight-forward pre-payment mechanism for sellers is restricted to low-value parcels).

Thanks. Fair points all around.

We do not have any of these considerations in the US, which is perhaps part of why so much stuff comes directly from abroad.

I'd guess for things like computers it actually did apply, because these are too expensive for the old de-minimus rules, but of course there's probably not that many small computer makers outside the US shipping there, and large ones either have their own infrastructure or have it figured out. And its certainly possible the overall bureaucracy was easier to deal with too (for all the common rules the EU has brought, fundamentally a lot of it is still per-country stuff and the needs of small sellers are often not really considered, and we also just have more rules in many sectors).

But $800 (I think that was the value?) de-minimus indeed makes a lot of cases easy.

Just to note, you forgot that UPS also adds an absolutely outrageous fee for handling customs.

It's not the same price. The shipping companies charge you a processing fee in addition to the actual tax, so you often end up paying a lot more. Bulk shipping is more efficient.

Well, I mean, sorta? This is the point where, indeed, rational discussion can happen. In the real world, VATs and tariffs are both taxes collected at the point of trade. The distinction is just about what boundary constitutes a "trade" and what accounting is done to determine the "value" of the trade. But they're close cousins and do most of the same thing and can be used for most of the same policy purposes.

But again, that's not what's happening in US policymaking right now. They don't want tariffs, they want "Tarrifs!", and splitting hairs over the precise definition isn't going to change their mind.

No this is incorrect. The VAT is paid by all the steps in the line and reclaimed until it hits the final seller. That seller collects the VAT and pays it to the taxman. If you import something into a European country, you pay VAT but the VAT is reclaimable basically immediately. Many European countries allow you to postpone the payment of vat as long as you are VAT-registered in that country. You can then declare it to your VAT tax return and basically deducted in the same return. So although the vat might give some cashflow problems, you cannot put it in the same ballpark as a tariff or import tax.

FWIW, I don't see how any of that rebuts the idea that VATs and tariffs are both taxes collected at the point of trade and that they can be used for basically all of the same policy purposes (which, as we all know, is not limited to revenue generation).

Yes yes yes, complex rules are complicated. So what? You can do things with a VAT that you can with a tariff, and that you can not with an income tax or estate tax or usage fee or whatever.

They are closely related policy instruments.

> None of these arguments were presented in a reasonable way, with numbers, ahead of a policy decision that made a considered attempt to find an optimal balance.

TFA is the transcript of an historical overview lecture, not a formal economic thesis on the topic, much less, a journal article.

Your point, while valid, might be enhanced by some counter-linking.

> President Trump wants to level this playing field.

No. It is an attempt to sanewash conservatives, because that is the whole reason for being for this university.

The part about Germany and cars is also crap.

> The part about Germany and cars is also crap.

So, could you suggest a link to a solid refutation?

Anybody who understands what VAT is and how it works cannot take this part of the article seriously. I hate VAT, I think it should cease to exist (it is still marginally better than sale taxes) but I made the effort to actually try to understand how it works before writing bullshit about it on basically a blog post.

The article is lying. At this point, it is not reasonable to assume this is just not understanding things.

People who work in these institutions lie, they are paid for lying and they do it to project their ideological agenda.

> The article is lying.

A legless assertion. Could you be more specific with the objection, please?

I think you greatly overestimate the understanding of people working in those institutions.

They have a framework and try to make everything they read/hear about go through that framework, even if it doesn't really fit. They don't really understand, but have strong opinions and held them at least as strongly, maybe more.

They aren't idiots in any case, but clearly, in this particular case, the author doesn't know what he is talking about.

> In addition, Germany’s value-added tax is remitted on exports but charged on imports.

VAT is paid regardless of who manufactured the car. It is something the final customer has to pay regardless of whether the product was made in EU or abroad. If you are buying BMW, you have to pay VAT. If you are buying Toyota, you have to pay VAT. If you are buying an American car, you have to pay exactly the same VAT. It is sales tax, basically, just managed differently to make tax fraud harder.

Also, Mercedes-Benz and BMW have great reputation and fit into European roads. Ford and General Motors do not have comparatively great reputation. Germans were buying Teslas tho, before those became associated with support to far right.

Article author is lying, plain and simple.

The article is a recounting of historical facts. Do you feel that relevant facts were omitted, and if so, what?

Merely asserting "lying" is unhelpful.

VAT is not an import tariff. That is a rather major lie. It is a tax applied equally to domestic and foreign produce. Not a mistake, because it is quite known to anyone who ever googled it.

Given they lie about something so straightforward, I am not inclined to trust whatever they write about history. History is super easy to cherry pick and present in manipulative way.

With all respect: to pretend that a "historical overview lecture" delivered on 6 May 2025 by a well-known conservative business pundit[1], before the Heritage Foundation, on the subject of "Tariffs in American History" ...

... is somehow completely objective and obviously unrelated to the giant shitstorm of contemporary US tariff policy is just laughable, sorry.

We both know what this is.

[1] The presentation might have fooled you, but John Steel Gordon is absolutely not an "economist" or "historian" in any professional sense.

> We both know what this is.

It's an historical overview. Was there a substantive rebuttal on offer, or just what sounds like innuendo?

TIL "noting the author and forum of a lecture with clear political relevance" == "innuendo".

The point isn't that he's wrong (though multiple people here are indeed pointing out things that are). It's that (1) his not being wrong doesn't remotely justify current policy and (2) who he is and where he spoke was very clearly intended to justify current policy. I mean, duh, as it were.

I mean, please. Link me another dry historical lecture hosted by Heritage. I dare you. Everything they do is political.

I specifically quoted the component of your reply that seemed to qualify as innuendo...and you attempt to shift the focus...

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