President-elect Trump has been toying with the idea to use his Presidential executive authority – allowed under existing trade laws – to introduce a 5% tariff on all imports into the U.S.
Although initially this proposal was considered a trial balloon to push WTO negotiations, re-negotiate NAFTA and more generally as an extension of the “America First” election rhetoric, Congress is now getting seriously concerned.
As you know, the cornerstone argument for the 5% import tariff is that VAT countries “subsidize” domestic exporters by allowing for the zero-rate, with credit. U.S. companies that import into other countries pay the import VAT, which the U.S. considers a tariff (never mind that the import VAT is refundable or creditable). The 5% import tariff is to counter the “export rebate” and to protect American manufacturers from “subsidized” imports into the U.S. – particularly from China.
The CNN report indicates that the 5% tariff would be one of the first executive actions of Trump as the new president.
See the CNN article here – be mindful of the video that autostarts in some browsers: http://www.cnn.com/2016/12/21/politics/donald-trump-tariffs/index.html