Hassett says Trump was ‘reciprocity’ in taxes, not tariffs

Reuters is talking about ‘reciprocal’ tariffs on European countries but a separate interview with White House economic adviser Kevin Hassett might offer a clearer picture of the agenda.

In an interview with Bloomberg, Hassett said Trump was “reciprocity” in how firms are taxed

Hassett
said that in 2023, US firms paid $370 billion abroad in value-added and
income taxes, whereas multinational firms operating in the US paid just
$57 billion.

“That’s
not reciprocal. That’s something fundamentally different,” he said.
“What President Trump wants us to do is to come up with a really smart
program that includes trade policy, tariffs and revisions to the tax
code, and he wants us to make it work so America is on a level playing
field again.”

This gets back to what Trump said about VAT taxes in Europe before. Most see those as taxes on consumers but Trump is saying they’re taxes on US companies.

Hassett also touched on the idea of US tariff rates matching those that foreign countries put on the US.

My guess at the moment is that this is all a big threat to get Europe to back off on something like a digital services tax on US tech giants.

This article was written by Adam Button at www.forexlive.com.