Donald Trump tweeted the following on Friday:
Countries charge U.S. companies taxes or tariffs while the U.S. charges them nothing or little.We should charge them SAME as they charge us!
Under NAFTA, Canada, Mexico and the U.S. reduced all tariffs to zero (aside from trade remedies of course), and therefore all three countries charge the SAME tariffs to each other. I am taking his tweet as an endorsement of that, and a commitment not to raise any tariffs on Canada or Mexico. Also, this is a good precedent for all of the bilateral trade agreements we are about to negotiate.
As for any taxes charged by other countries, I assume here he means the VAT. Obviously, the United States is free to adopt a VAT of its own, although that seems unlikely. Can Trump and the Republicans agree on a version of the Destination Based Cash Flow Tax that treats imports and domestic products roughly equally (as the VATs used by other countries do), and therefore has a chance of being found consistent with WTO rules? Maybe, but there is still work to be done to get there.
