A Couple of Questions Regarding "The Reality Of Tariffs" -

4/11/2025 | self

[sauropod]

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[spel_grammer_an_punct_polise]

Recently I had to buy a headlight bulb at the local Auto Zone store.

I read all of the documentation on the box which held the bulb.

The parts were made in the U.S.A. then shipped to Vietnam to be ‘assembled.’

After assembly they were shipped to Mexico to be ‘packaged’ in a box which was made in.....Thailand.

As far as I am concerned, Globalism jumped the shark with the above maneuver. I’m equally sure that equivalent maneuvers happen all of the time.

[Oorang]

Using Germany as an example there are tariffs, VAT tax, generally 19% paid by the importer (seller), and Import Duties, paid by the seller. In other words it’s more than just tariffs.

[ma_che62]

That is misleading.

When a German goes to purchase almost anything, whether made in Germany or not, the German pays the VAT.

In other words, the VAT does not discriminate against the country of origin of the product the way tariffs do. If the German buys a German made product, he does not pay a tariff...but he does pay the VAT.

[Oorang]

I'm not a tax expert. There are two different forms of VAT. The one most folks are familiar with that you are referring to "When a German goes to purchase almost anything, whether made in Germany or not, the German pays the VAT."
There is also an "import VAT"

Import VAT (or EU import VAT) is a tax applied to goods brought into the European domestic market from a “third country,” which is a country that does not belong to the EU or the European customs territory. Therefore, no import VAT is payable within the EU. Import VAT, often called “import tax,” is designed to make sure that imported goods are taxed in the same way as goods produced and sold within the country.

Import VAT is broadly the same as regular VAT, which is charged on the consumption or sale of goods and services in Germany or for deliveries within the EU. For example, when goods are brought into Germany from a non-EU country, an import VAT is due—as specified in Section 1, Paragraph 1, Number 4 of the VAT Act. Unlike regular VAT, import VAT is classified as an import tax under customs regulations, in addition to being considered a consumption tax. Regular VAT is collected by the tax office, whereas import VAT is imposed by the German customs agency.

https://stripe.com/resources/more/import-tax-germany#what-is-import-vat

What is the purpose of import VAT?

The import VAT ensures that goods do not reach the consumer untaxed. No tax is levied in the exporting country, but the tax is charged in the importing country. Import VAT is of great importance for tax revenues. In 2021 alone, German customs levied around 63 billion euros in import VAT.

https://eclear.com/knowledge/import-vat/

[ma_che62]

Thank you!
Very well explained..not the regular VAT but an “Import VAT.”

[Oorang]

Exactly. The import VAT is anywhere between 7% and 19% depending on the product being imported. Which is how Germany makes lots of money...” In 2021 alone, German customs levied around 63 billion euros in import VAT.”