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Yahoo
a day ago
- Politics
- Yahoo
Whitmer denies MSU request to remove Vassar, Denno despite misconduct findings
EAST LANSING — In a two-paragraph letter, Gov. Gretchen Whitmer put to rest 14-months of uncertainty about the future of two Michigan State University trustees found complicit of misconduct. Whitmer in a May 30 letter declined the MSU board's request to remove trustees Rema Vassar, D-Detroit, and Dennis Denno, D-East Lansing, but claimed her decision should not be interpreted as 'condoning of the conduct' of either trustee. Among other issues, Vassar was found by university investigators to have taken free tickets and flights, and Denno to have pressured consultants investigating MSU's response the 2023 mass shooting on campus to tone down criticisms of trustees' actions. "The denial of the request by no means indicates a condoning of the conduct alleged in the referral," Whitmer's Deputy Legal Counsel Amy Lishinski wrote in a letter to MSU board Chair Kelly Tebay. "Rather, it only means that other considerations related to the Governor's removal authority weigh against removal under these circumstances at this time." Stacey LaRouche, press secretary for Whitmer did not answer follow up questions about what these other considerations were and what conduct would warrant removal. MSU spent more than $2 million for an investigation by the Washington D.C.-based law firm Miller & Chevalier that found that Vassar and Denno violated multiple codes of conduct and ethics and acted outside the boundaries of their roles. Miller & Chevalier's investigation was sparked by a letter from Trustee Brianna Scott, D-Muskegon, to her fellow trustees and local media alleging 10 instances of misconduct by Vassar, who at the time chaired the MSU board. Miller & Chevalier found evidence to support some, but not all, of Scott's allegations. The tone of Whitmer's letter lacked the strong words she used more than a year ago after the allegations surfaced, and before MSU's own investigation found that many of Scott's concerns had merit. Days after the allegations were made public, Whitmer called them "deeply concerning." "I'm taking it very seriously," Whitmer said at the time. "I think the allegations, if accurate, amount to a serious breach of conduct in what we expect of our board members and ... the oath that they took." Neither Vassar and Denno responded to a request for comment June 3. MSU's investigation found that Vassar and Denno bullied and harassed former interim President Teresa Woodruff and then-Faculty Senate Chair Jack Lipton, leading to Lipton suing the trustees. A federal judge last week dismissed the board and several trustees from that lawsuit, but said Lipton's claims against Vassar and Denno could proceed. The investigation also found evidence Denno tried to get the consultants hired by the university who analyzed MSU's response to the mass shooting to change their findings after the report criticized the trustees' response. Vassar also accepted courtside tickets and a private flight from a donor for her and her daughter to attend a basketball game. Both trustees acted outside the authority of their roles, investigators found, as well as evidence that both Vassar and Denno attempted to "embarrass and unsettle" former Woodruff and attack Lipton. Miller & Chevalier concluded its report with several recommendations, including that Vassar and Denno be censured and referred to Whitmer so she could consider removing them. The board followed both recommendations, and also censured Scott for making her allegations public. Vassar and Denno have maintained that Miller & Chevalier's investigation was incomplete and misleading. "I refute most of the allegations in the Miller & Chevalier (MC) report," Denno said in an email to the State Journal last year. "I will accept a censure but contest any other form of punishment. What has been proposed is overly-punitive in nature." Through her attorneys, paid for by MSU, Vassar released a statement calling the report 'profoundly flawed.' She is involved in a dispute with the university over legal fees for attorneys MSU hired on her behalf. Whitmer has the sole authority to remove the trustees as governor. MSU's trustees, along with the University of Michigan's Board of Regents and Wayne State University's Board of Governors, are the only college governing bodies whose members are elected in statewide elections in Michigan, and as elected officials the only person who can remove them is the governor. In 2020 Vassar was elected with more than 2.3 million votes and in 2022, Denno was elected with about 1.9 million votes. Eric Lupher, president of the Livonia-based nonprofit public affairs research organization Citizens Research Council, told the State Journal last year that a governor removing an elected official in Michigan was so rare there was no defined process. The last high-profile effort to remove an elected official by a Michigan governor was over a decade ago, Lupher said. And the elected official in question, former Detroit Mayor Kwame Kilpatrick, resigned before Gov. Jennifer Granholm could announce a decision. Under the terms of their censure, Vassar and Denno were removed from all board committees and liaison positions. Those restrictions expired Dec. 31 and both sought and were granted seats on the board committee for academic affairs and the board committee on budget and finance in January. The controversy for both is not over, however. In a 17-page ruling dated May 28, U.S. District Judge Hala Jarbou said Lipton presented facts supporting a claim for a First Amendment violation against Vassar and Denno as individuals. Lipton has argued in court documents that Vassar and Denno encouraged students to attack him and label him a racist following comments he made after an Oct. 27, 2023, board meeting when he used the term "mob rule" to describe how Vassar chaired the meeting. MSU's own investigation supported some of Lipton's claims in the suit. "According to the amended complaint, Lipton's comment to the press about the October 27, 2023 BOT meeting was protected speech, and Vassar and Denno's subsequent conduct was retaliatory adverse action," Jarbou wrote. "Lipton has also demonstrated that Vassar will continue to retaliate against him for this speech, but he did not demonstrate the need for prospective relief from Denno." Jarbou dismissed Lipton's claims against the rest of the board in the same ruling. Here's the full letter from Lishinski to Tebay: "Re: Removal Request "Dear Chairperson Tebay, "We have received the referral from the Board of Trustees dated March 3, 2024, of Trustee Rema Vassar and Trustee Dennis Denno for removal 'per MCL 168.293.' Because our office takes seriously any complaint regarding misconduct by public officials, we reviewed the request carefully. 'I am writing to notify you that the request has been denied. The denial of therequest by no means indicates a condoning of the conduct alleged in the it only means that other considerations related to the Governor's removalauthority weigh against removal under these circumstances at this time." Sincerely,Amy LishinskiDeputy Legal Counsel Contact Sarah Atwood at satwood@ Follow her on X @sarahmatwood. This article originally appeared on Lansing State Journal: Whitmer denies MSU request to remove trustees Vassar, Denno
Yahoo
29-05-2025
- General
- Yahoo
Federal judge issues $20M verdict against Syria for torture of US citizen taken captive in 2019
A Washington, D.C.-based law firm secured a judgment of more than $20 million against the Syrian Arab Republic on behalf of Sam Goodwin, a St. Louis native held captive in the country's notorious prison system for 63 days while on a trip to visit every country in the world. U.S. District Court Judge Colleen Kollar-Kotelly awarded Goodwin $20,201,620 in damages, about $10 million each in compensatory and punitive damages, in response to a lawsuit filed under the Foreign Sovereign Immunities Act's "state sponsor of terrorism" exception. Roughly half of the judgment is payable through the U.S. Victims of State-Sponsored Terrorism Fund, which is financed by sanctions proceeds and other penalties. Depending on the amount of money in the fund, Goodwin could get a certain percentage of compensatory damages over several years. Family Of American Hostage Tortured In Lebanon Wins Landmark Case Against Iran "Nations that violate international human rights standards must face consequences, and courageous survivors like Sam help ensure the world does not ignore the atrocities perpetrated by the Assad regime," said Kirby Behre, a member of Miller & Chevalier's litigation department and lead counsel for Goodwin. "While nothing can completely compensate for Sam's suffering, this represents yet another powerful step forward in the broader effort to confront those responsible for such grave injustices." Read On The Fox News App Goodwin entered war-torn Syria from Iraq in 2019 as part of a years-long quest to visit every country in the world. He stayed in Qamishli, a city on the Turkey-Syria border, which he believed was under the control of the U.S.-backed Kurds. Syria's Liberated Political Prisons Reveal Grim Reality Of Bashar Assad's Regime Of Torture The former Division I collegiate hockey player was detained by men in military uniforms at a roundabout not far from his hotel while on FaceTime with his mother, Ann. "I was taken into the basement of a facility that I now know is called Syria's Military Intelligence [Branch] number 215, a facility notoriously known for housing political prisoners, and I was held here in solitary confinement for 27 days," Goodwin told Fox News Digital last year ahead of the release of his book, "Saving Sam: The True Story of an American's Disappearance in Syria and His Family's Extraordinary Fight to Bring Him Home." "The only human interaction I had was for a few seconds in the morning and evening when the guards who brought bread and boiled potatoes and water." His lawyers said he was tortured at Branch 215 by the now-ousted regime of former Syrian dictator Bashar al-Assad and subjected to prolonged interrogation. At one point, Goodwin's interrogator threatened to hand him over to ISIS after he refused to admit to accusations of being a spy. Us Diplomats In Damascus For First Time In More Than 10 Years Following Fall Of Assad Regime His release was secured by General Abbas Ibrahim, then Lebanon's top security official, who was put in contact with the family by Joseph Abbas, the uncle of Goodwin's sister's friend and former college roommate. His family worked tirelessly to bring him home, collaborating with the FBI, CIA, State Department, the special presidential envoy for hostage affairs, Vatican envoys, Middle East experts and others. "This judgment is about far more than what happened to me. It's a stand for anyone who has suffered human rights abuses around the world. I hope it gives other victims the courage to speak up and, above all, serves as a warning that such crimes will not be tolerated or forgotten," Goodwin told Fox News Digital in a statement. Miller & Chevalier has secured other judgments against the Syrian Arab Republic, including one for approximately $50 million in 2023 for Kevin Dawes, another American citizen who was illegally arrested, imprisoned and tortured in Syria. In July, it filed a lawsuit on behalf of the family of Dr. Majd Kamalmaz, a psychotherapist and humanitarian who was detained at a government checkpoint in Damascus, Syria, in 2017, accusing the Syrian Arab Republic of abducting, torturing and killing article source: Federal judge issues $20M verdict against Syria for torture of US citizen taken captive in 2019
The Hill
31-03-2025
- Business
- The Hill
Trump's reciprocal tariffs will overturn decades of trade policy
WASHINGTON (AP) — President Donald Trump is taking a blowtorch to the rules that have governed world trade for decades. The 'reciprocal'' tariffs that he is expected to announce Wednesday are likely to create chaos for global businesses and conflict with America's allies and adversaries alike. Since the 1960s, tariffs — or import taxes — have emerged from negotiations between dozens of countries. Trump wants to seize the process. 'Obviously, it disrupts the way that things have been done for a very long time,'' said Richard Mojica, a trade attorney at Miller & Chevalier. 'Trump is throwing that out the window … Clearly this is ripping up trade. There are going to have to be adjustments all over the place.'' Pointing to America's massive and persistent trade deficits – not since 1975 has the U.S. sold the rest of the world more than it's bought — Trump charges that the playing field is tilted against U.S. companies. A big reason for that, he and his advisers say, is because other countries usually tax American exports at a higher rate than America taxes theirs. Trump has a fix: He's raising U.S. tariffs to match what other countries charge. The president is an unabashed tariff supporter. He used them liberally in his first term and is deploying them even more aggressively in his second. Since returning to the White House, he has slapped 20% tariffs on China, unveiled a 25% tax on imported cars and trucks set to take effect Thursday, effectively raised U.S. taxes on foreign steel and aluminum and imposed levies on some goods from Canada and Mexico, which he may expand this week. Economists don't share Trump's enthusiasm for tariffs. They're a tax on importers that usually get passed on to consumers. But it's possible that Trump's reciprocal tariff threat could bring other countries to the table and get them to lower their own import taxes. 'It could be win-win,' said Christine McDaniel, a former U.S. trade official now at George Mason University's Mercatus Center. 'It's in other countries' interests to reduce those tariffs.' She noted that India has already cut tariffs on items from motorcycles to luxury cars and agreed to ramp up purchases of U.S. energy. What are reciprocal tariffs and how do they work? They sound simple: The United States would raise its tariff on foreign goods to match what other countries impose on U.S. products. 'If they charge us, we charge them,'' the president said in February. 'If they're at 25, we're at 25. If they're at 10, we're at 10. And if they're much higher than 25, that's what we are too.'' But the White House didn't reveal many details. It has directed Commerce Secretary Howard Lutnick to deliver a report this week about how the new tariffs would actually work. Among the outstanding questions, noted Antonio Rivera, a partner at ArentFox Schiff and a former attorney with U.S. Customs and Border Protection, is whether the U.S. is going to look at the thousands of items in the tariff code – from motorcycles to mangos — and try to level the tariff rates out one by one, country by country. Or whether it will look more broadly at each country's average tariff and how it compares to America. Or something else entirely. 'It's just a very, very chaotic environment,' said Stephen Lamar, president and CEO of the American Apparel & Footwear Association. 'It's hard to plan in any sort of long-term, sustainable way.'' How did tariffs get so lopsided? America's tariffs are generally lower than those of its trading partners. After World War II, the United States pushed for other countries to lower trade barriers and tariffs, seeing free trade as a way to promote peace, prosperity and American exports around the world. And it mostly practiced what it preached, generally keeping its own tariffs low and giving American consumers access to inexpensive foreign goods. Trump has broken with the old free trade consensus, saying unfair foreign competition has hurt American manufacturers and devastated factory towns in the American heartland. During his first term, he slapped tariffs on foreign steel, aluminum, washing machines, solar panels and almost everything from China. Democratic President Joe Biden largely continued Trump's protectionist policies. The White House has cited several examples of especially lopsided tariffs: Brazil taxes ethanol imports, including America's, at 18%, but the U.S. tariff on ethanol is just 2.5%. Likewise, India taxes foreign motorcycles at 100%, America just 2.4%. Does this mean the U.S. been taken advantage of? The higher foreign tariffs that Trump complains about weren't sneakily adopted by foreign countries. The United States agreed to them after years of complex negotiations known as the Uruguay Round, which ended in a trade pact involving 123 countries. As part of the deal, the countries could set their own tariffs on different products – but under the 'most favored nation'' approach, they couldn't charge one country more than they charged another. So the high tariffs Trump complains about aren't aimed at the United States alone. They hit everybody. Trump's grievances against U.S. trading partners also come at an odd time. The United States, running on strong consumer spending and healthy improvements in productivity, is outperforming the world's other advanced economies. The U.S. economy grew nearly 9% from just before COVID-19 hit through the middle of last year — compared with just 5.5% for Canada and just 1.9% for the European Union. Germany's economy shrank 2% during that time. Trump's plan goes beyond foreign countries' tariffs Not satisfied with scrambling the tariff code, Trump is also going after other foreign practices he sees as unfair barriers to American exports. These include subsidies that give homegrown producers an advantage over U.S. exports; ostensible health rules that are used to keep out foreign products; and loose regulations that encourage the theft of trade secrets and other intellectual property. Figuring out an import tax that offsets the damage from those practices will add another level of complexity to Trump's reciprocal tariff scheme. The Trump team is also picking a fight with the European Union and other trading partners over so-called value-added taxes. Known as VATs, these levies are essentially a sales tax on products that are consumed within a country's borders. Trump and his advisers consider VATs a tariff because they apply to U.S. exports. Yet most economists disagree, for a simple reason: VATs are applied to domestic and imported products alike, so they don't specifically target foreign goods and haven't traditionally been seen as a trade barrier. And there's a bigger problem: VATs are huge revenue raisers for European governments. 'There is no way most countries can negotiate over their VAT … as it is a critical part of their revenue base,'' Brad Setser, senior fellow at the Council on Foreign Relations, posted on X. Paul Ashworth, chief North America economist for Capital Economics, says that the top 15 countries that export to the U.S. have average VATs topping 14%, as well as duties of 6%. That would mean U.S. retaliatory tariffs could reach 20% — much higher than Trump's campaign proposal of universal 10% duties. Tariffs and the trade deficit Trump and some of his advisers argue that steeper tariffs would help reverse the United States' long-standing trade deficits. But tariffs haven't proven successful at narrowing the trade gap: Despite the Trump-Biden import taxes, the deficit rose last year to $918 billion, second-highest on record. The deficit, economists say, is a result of the unique features of the U.S. economy. Because the federal government runs a huge deficit, and American consumers like to spend so much, U.S. consumption and investment far outpaces savings. As a result, a chunk of that demand goes to overseas goods and services. The U.S. covers the cost of the trade gap by essentially borrowing from overseas, in part by selling treasury securities and other assets. 'The trade deficit is really a macroeconomic imbalance,' said Kimberly Clausing, a UCLA economist and former Treasury official. 'It comes from this lack of desire to save and this lack of desire to tax. Until you fix those things, we'll run a trade imbalance.'
Gulf Today
16-02-2025
- Business
- Gulf Today
Trump's reciprocal tariffs will overturn decades of trade policy
President Donald Trump is taking a blowtorch to the rules that have governed world trade for decades. The 'reciprocal'' tariffs that he announced on Thursday are likely to create chaos for global businesses and conflict with America's allies and adversaries alike. Since the 1960s, tariffs - or import taxes - have emerged from negotiations between dozens of countries. Trump wants to seize the process. 'Obviously, it disrupts the way that things have been done for a very long time,'' said Richard Mojica, a trade attorney at Miller & Chevalier. 'Trump is throwing that out the window ... Clearly this is ripping up trade. There are going to have to be adjustments all over the place.'' Pointing to America's massive and persistent trade deficits - not since 1975 has the US sold the rest of the world more than it's bought -- Trump charges that the playing field is tilted against US companies. A big reason for that, he and his advisers say, is because other countries usually tax American exports at a higher rate than America taxes theirs. Trump has a fix: He's raising US tariffs to match what other countries charge. The president is an unabashed tariff supporter. He used them in his first term, and three weeks into his second he has already slapped 10% tariffs on China; effectively raised US taxes on foreign steel and aluminum; and threatened, then delayed for 30 days, 25% taxes on goods from Canada and Mexico. Economists don't share Trump's enthusiasm for tariffs. They're a tax on importers that usually get passed on to consumers. But it's possible that Trump's reciprocal tariff threat could bring other countries to the table and get them to lower their own import taxes. 'It could be win-win,' said Christine McDaniel, a former US trade official now at George Mason University's Mercatus Center. 'It's in other countries' interests to reduce those tariffs.' She noted that India has already cut tariffs on items from motorcycles to luxury cars and agreed to ramp up purchases of US energy. They sound simple: The United States would raise its tariff on foreign goods to match what other countries impose on US products. 'If they charge us, we charge them,'' the president told reporters on Sunday. 'If they're at 25, we're at 25. If they're at 10, we're at 10. And if they're much higher than 25, that's what we are too.'' But the White House didn't reveal many details. It has directed Commerce Secretary Howard Lutnick to deliver a report April 1 about how the new tariffs would actually work. Among the outstanding questions, noted Antonio Rivera, a partner at ArentFox Schiff and a former attorney with US Customs and Border Protection, is whether the US is going to look at the thousands of items in the tariff code - from motorcycles to mangos -- and try to level the tariff rates out one by one, country by country. Or whether it will look more broadly at each country's average tariff and how it compares to America. Or something else entirely. 'It's just a very, very chaotic environment,' said Stephen Lamar, president and CEO of the American Apparel & Footwear Association. 'It's hard to plan in any sort of long-term, sustainable way.'' America's tariffs are generally lower than those of its trading partners. After World War II, the United States pushed for other countries to lower trade barriers and tariffs, seeing free trade as a way to promote peace, prosperity and American exports around the world. And it mostly practiced what it preached, generally keeping its own tariffs low and giving American consumers access to inexpensive foreign goods. Trump has broken with the old free trade consensus, saying unfair foreign competition has hurt American manufacturers and devastated factory towns in the American heartland. During his first term, he slapped tariffs on foreign steel, aluminum, washing machines, solar panels and almost everything from China. Democratic President Joe Biden largely continued Trump's protectionist policies. The White House has cited several examples of especially lopsided tariffs: Brazil taxes ethanol imports, including America's, at 18%, but the US tariff on ethanol is just 2.5%. Likewise, India taxes foreign motorcycles at 100%, America just 2.4%. The higher foreign tariffs that Trump complains about weren't sneakily adopted by foreign countries. The United States agreed to them after years of complex negotiations known as the Uruguay Round, which ended in a trade pact involving 123 countries. As part of the deal, the countries could set their own tariffs on different products - but under the 'most favored nation'' approach, they couldn't charge one country more than they charged another. So the high tariffs Trump complains about aren't aimed at the United States alone. They hit everybody. Trump's grievances against US trading partners also come at an odd time.
Chicago Tribune
15-02-2025
- Business
- Chicago Tribune
President Trump's reciprocal tariffs will overturn decades of trade policy
WASHINGTON — President Donald Trump is taking a blowtorch to the rules that have governed world trade for decades. The 'reciprocal'' tariffs that he announced Thursday are likely to create chaos for global businesses and conflict with America's allies and adversaries alike. Since the 1960s, tariffs — or import taxes — have emerged from negotiations between dozens of countries. Trump wants to seize the process. 'Obviously, it disrupts the way that things have been done for a very long time,'' said Richard Mojica, a trade attorney at Miller & Chevalier. 'Trump is throwing that out the window … Clearly this is ripping up trade. There are going to have to be adjustments all over the place.'' Pointing to America's massive and persistent trade deficits – not since 1975 has the U.S. sold the rest of the world more than it's bought — Trump charges that the playing field is tilted against U.S. companies. A big reason for that, he and his advisers say, is because other countries usually tax American exports at a higher rate than America taxes theirs. Trump has a fix: He's raising U.S. tariffs to match what other countries charge. The president is an unabashed tariff supporter. He used them in his first term, and three weeks into his second he has already slapped 10% tariffs on China; effectively raised U.S. taxes on foreign steel and aluminum; and threatened, then delayed for 30 days, 25% taxes on goods from Canada and Mexico. Economists don't share Trump's enthusiasm for tariffs. They're a tax on importers that usually get passed on to consumers. But it's possible that Trump's reciprocal tariff threat could bring other countries to the table and get them to lower their own import taxes. 'It could be win-win,' said Christine McDaniel, a former U.S. trade official now at George Mason University's Mercatus Center. 'It's in other countries' interests to reduce those tariffs.' She noted that India has already cut tariffs on items from motorcycles to luxury cars and agreed to ramp up purchases of U.S. energy. What are reciprocal tariffs and how do they work? They sound simple: The United States would raise its tariff on foreign goods to match what other countries impose on U.S. products. 'If they charge us, we charge them,'' the president told reporters on Sunday. 'If they're at 25, we're at 25. If they're at 10, we're at 10. And if they're much higher than 25, that's what we are too.'' But the White House didn't reveal many details. It has directed Commerce Secretary Howard Lutnick to deliver a report April 1 about how the new tariffs would actually work. Among the outstanding questions, noted Antonio Rivera, a partner at ArentFox Schiff and a former attorney with U.S. Customs and Border Protection, is whether the U.S. is going to look at the thousands of items in the tariff code – from motorcycles to mangos — and try to level the tariff rates out one by one, country by country. Or whether it will look more broadly at each country's average tariff and how it compares to America. Or something else entirely. 'It's just a very, very chaotic environment,' said Stephen Lamar, president and CEO of the American Apparel & Footwear Association. 'It's hard to plan in any sort of long-term, sustainable way.'' How did tariffs get so lopsided? America's tariffs are generally lower than those of its trading partners. After World War II, the United States pushed for other countries to lower trade barriers and tariffs, seeing free trade as a way to promote peace, prosperity and American exports around the world. And it mostly practiced what it preached, generally keeping its own tariffs low and giving American consumers access to inexpensive foreign goods. Trump has broken with the old free trade consensus, saying unfair foreign competition has hurt American manufacturers and devastated factory towns in the American heartland. During his first term, he slapped tariffs on foreign steel, aluminum, washing machines, solar panels and almost everything from China. Democratic President Joe Biden largely continued Trump's protectionist policies. The White House has cited several examples of especially lopsided tariffs: Brazil taxes ethanol imports, including America's, at 18%, but the U.S. tariff on ethanol is just 2.5%. Likewise, India taxes foreign motorcycles at 100%, America just 2.4%. Does this mean the U.S. been taken advantage of? The higher foreign tariffs that Trump complains about weren't sneakily adopted by foreign countries. The United States agreed to them after years of complex negotiations known as the Uruguay Round, which ended in a trade pact involving 123 countries. As part of the deal, the countries could set their own tariffs on different products – but under the 'most favored nation'' approach, they couldn't charge one country more than they charged another. So the high tariffs Trump complains about aren't aimed at the United States alone. They hit everybody. Trump's grievances against U.S. trading partners also come at an odd time. The United States, running on strong consumer spending and healthy improvements in productivity, is outperforming the world's other advanced economies. The U.S. economy grew nearly 9% from just before COVID-19 hit through the middle of last year — compared with just 5.5% for Canada and just 1.9% for the European Union. Germany's economy shrank 2% during that time. Trump's plan goes beyond foreign countries' tariffs Not satisfied with scrambling the tariff code, Trump is also going after other foreign practices he sees as unfair barriers to American exports. These include subsidies that give homegrown producers an advantage over U.S. exports; ostensible health rules that are used to keep out foreign products; and loose regulations that encourage the theft of trade secrets and other intellectual property. Figuring out an import tax that offsets the damage from those practices will add another level of complexity to Trump's reciprocal tariff scheme. The Trump team is also picking a fight with the European Union and other trading partners over so-called value-added taxes. Known as VATs, these levies are essentially a sales tax on products that are consumed within a country's borders. Trump and his advisers consider VATs a tariff because they apply to U.S. exports. Yet most economists disagree, for a simple reason: VATs are applied to domestic and imported products alike, so they don't specifically target foreign goods and haven't traditionally been seen as a trade barrier. And there's a bigger problem: VATs are huge revenue raisers for European governments. 'There is no way most countries can negotiate over their VAT … as it is a critical part of their revenue base,'' Brad Setser, senior fellow at the Council on Foreign Relations, posted on X. Paul Ashworth, chief North America economist for Capital Economics, says that the top 15 countries that export to the U.S. have average VATs topping 14%, as well as duties of 6%. That would mean U.S. retaliatory tariffs could reach 20% — much higher than Trump's campaign proposal of universal 10% duties. Tariffs and the trade deficit Trump and some of his advisers argue that steeper tariffs would help reverse the United States' long-standing trade deficits. But tariffs haven't proven successful at narrowing the trade gap: Despite the Trump-Biden import taxes, the deficit rose last year to $918 billion, second-highest on record. The deficit, economists say, is a result of the unique features of the U.S. economy. Because the federal government runs a huge deficit, and American consumers like to spend so much, U.S. consumption and investment far outpaces savings. As a result, a chunk of that demand goes to overseas goods and services. The U.S. covers the cost of the trade gap by essentially borrowing from overseas, in part by selling treasury securities and other assets. 'The trade deficit is really a macroeconomic imbalance,' said Kimberly Clausing, a UCLA economist and former Treasury official. 'It comes from this lack of desire to save and this lack of desire to tax. Until you fix those things, we'll run a trade imbalance.' Originally Published: February 15, 2025 at 1:47 PM CST
