Do you approve or disapprove of a 20% tax on Mexican imports?

[DanTex]

55. The phrase "Trump's economic advisors" should have tipped you off.

No, a VAT doesn't disadvantage US exports or encourage relocation of factories.

If a good is manufactured in Mexico, and exported to the US, yes, they get a VAT rebate. That's a rebate for VAT that has already been paid on the manufacture of those goods. So that producer pays zero VAT in the end.

If a good is manufactured in the US, the producer also pays zero VAT, because the US doesn't have a VAT. So it makes no difference -- no VAT either way.

In terms of US exports to Mexico, they are charged VAT. But if a product is manufactured in Mexico and then sold in Mexico, then it is also charged a VAT. So there's a VAT no matter where the production takes place.

So in either of the cases, whether the good is sold in the US or Mexico, the same amount of VAT is paid no matter where the product is manufactured.