Jason Cummins argues that the EU's valued added tax justifies Donald Trump's automobile tariffs ("A 25% tariff on US imports from Europe is fair", Markets Insight, March 27). In so doing, he mixes apples with oranges and shows a misunderstanding of how VAT works.
VAT is a tax that consumers pay, akin to sales tax. In a VAT regime, producers are reimbursed the tax they pay their suppliers, so they act merely as tax collectors in function of the value they add. This makes for an effective, though not foolproof, check against tax evasion.