Will U.S. tax reform lead to trade war? : As part of a broader corporate tax reform, Congressional Republicans and the Trump Administration are pondering border tax adjustment with the effect of supporting exports and discouraging imports. Border tax adjustment is a hugely controversial topic that for decades provoked debates at the GATT/WTO about what rules that should apply for preventing domestic taxes to distort competition. If the Trump Administration now goes for a border tax adjustments, what form is it likely to take? Will it stand up to WTO rules? How would it affect Europe’s trade with the United States? Should Europe take action to countervail its effects?
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