---
title: Trump will retaliate to VAT. This is potentially catastrophic for EU exporters
description: "*TRUMP: VAT TAX WILL BE VIEWED AS A TARIFF\n*TRUMP: WILL CONSIDER COUNTRIES THAT USE VAT\n*TRUMP: PROVISIONS WILL BE MADE FOR NON-MONETARY TARIFFS\n\nThe VAT response is notable because the tariff differential for the EU, for example, with and without VAT is massive and rises from just 2% (without VAT) to a whopping 18% with! And judging by Trump's comments, which said that the EU is \"absolutely brutal\" on trade, the inclusion of VAT is precisely meant to punish Europe.\n\nThe chart below shows the amount that each country's VAT exceeds the US sales tax. And so, if indeed Trump imposes a reciprocal tariff policy also accounted for foreign VATs, it could add another 10% to the average US effective tariff rate.\n\nThat could be catastrophic to exporters, and Deutsche Bank's George Saravelos agrees writing that if reciprocal tariffs are applied on a VAT basis, \"European countries would be much higher on the list of impacted countries given high consumption taxes.\" Like Goldman, the DB strategist notes that the overall US tariff rate would increase by more than 10%\n\nSource: zerohedge"
---

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# [Trump will retaliate to VAT. This is potentially catastrophic for EU exporters](https://blog.syzgroup.com/syz-the-moment/trump-will-retaliate-to-vat.-this-is-potentially-catastrophic-for-eu-exporters)

 Written by [Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/syz-the-moment/author/charles-henry-monchau) | Feb 14, 2025, 2:30:27 PM

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