A 21 percent tariff makes it an easy decision to ship from Switzerland instead of the UK.
Britain is at risk of a £24billion hit to the economy after Donald Trump vowed to impose tariffs on countries that charge VAT.
The US President said he would charge reciprocal tariffs ‘for purposes of fairness’, which could result in a 21pc levy on goods exported to America.
He vowed to address ‘each country one by one’ – meaning it is not yet clear what the impact on Britain will be.
The UK currently charges a 20% standard VAT for most goods and services. Trump told reporters that he views VAT as a tariff.
The National Institute of Economic and Social Research (NIESR) previously estimated that tariffs of that scale could knock 0.4 percentage points off UK economic growth for the next two years – equivalent to around £24billion.
‘I’ve decided for purposes of fairness that I will charge a reciprocal tariff. It’s fair to all. No other country can complain,’ Trump told reporters as he signed the new order putting them in place.
It is a bit rich for the countries charging exorbitant VAT to complain about tariffs. VAT is a tax on imports, and the little redefinition game isn’t a justification for complaining about the USA doing the same.
DISCUSS ON SG