Tuesday, December 12, 2017

Europe Is Warning The U.S. That Proposed Tax Cuts Would Contravene Existing Trade Agreements


Daily Mail: Europe's five biggest economies warn Trump that his tax plan may violate international trade rules and harm the global economy by giving US companies an advantage over foreign rivals

* Trump planning tax reforms that could reshape international business tax rules
* But finance ministers from five EU countries have voiced 'significant concerns'
* Fears reforms could risk 'seriously hampering genuine trade' between US and EU
* Ministries from UK, France, Italy, Spain and Germany issued warning in a letter to US Treasury Secretary Steven Mnuchin

Europe's five biggest economies have warned Donald Trump that plans for massive US tax reforms may end up violating international trade rules.

Finance ministers from Germany, France, Britain, Italy and Spain say they have 'significant concerns' about some of the US President's tax initiatives and fear they could harm the global economy.

In a letter to US Treasury Secretary Steven Mnuchin, the ministers said the tax overhaul could risk 'seriously hampering genuine trade and investment flows' between Europe and America.

Read more ....

Update: Europe doesn't like Trump administration's tax plans (CNN)

WNU Editor: I understand the European point of view .... that they do not want to change their own tax policies when it comes to corporations, and they like to maintain the control that they have now. But these new U.S. rules will change that .... specifically U.S. corporations being forced to keep their investments and monies in the U.S. as well as making the U.S. a more attractive place for other companies and countries to invest their money in. My suggestion is that the Europeans should take a page from the Chinese on what to do. The Chinese have accepted the U.S. moving forward on these changes, and they are adjusting their economy .... China Unveils Plan To Combat Trump Tax Reform: “We’ll Have Tough Battles" (Zero Hedge). But here is an easy prediction, the Europeans are not going to implement anywhere near what the Chinese are doing. Raising interest rates, lowering tax rates, etc. .... there is no political will in the EU to implement such a policy .... hence the protestations and the very real prospect of a trade/finance war between the EU and the U.S.. But if it comes to that .... here is another easy prediction. On this battle, the U.S. will win.

3 comments:

Young Communist said...

Simply US build and change rules of play when they want and force stupid European servants to follow, even if they are not prepared or in conditions to do the same.

Of course this method assure weak points useful against competitors, even if they are vassals (and not friends) and are more annoying of those changes every time they are used.

China has both a better internal and external vision of the things and the power to make their own agenda.

B.Poster said...

YC: I think you read this the wrong way. The Europeans are far from servants to America. The opposite is much closer to being the case. The Europeans are mad because their American puppets/vassals are refusing to stay under their thumbs. Therein lies the real reason for the hatred of Trump. He represents, to them at least, the possibility of a strong independent America that does not kowtow to them.

With that said China's "vision" may we better. We shall see. While I would like to think the US can "win" a trade/finance war with the EU, I am not as optimistic on this as the editor is. In this area, the US has little choice. It has been backed into a corner and cannot continue to be slaves to western Europe. We have to act decisively to make ourselves competitive in the global market. As to whether or not this is the proper approach, we shall see.

Anonymous said...

Trump is challenging EU dogma on many fronts from Climate change, Jerusalem, defense spending, immigration, taxes, Brexit and the 7 Seas bloc. In each case the US is opposite the EU and it led this week to the Germans, French, Brits and other EU states condemning the US in the Security Council or General Assembly over Jerusalem. These points of conflict will grow and the tenor will get less friendly. Does this mark the end of the post WWII alliance system between the US and Europe. Possible. Not inconceivable anymore.