It's time to unmask the Trump tariffs for what they really are: A giant national sales tax that will hobble growth

"Buckle up, Americans. You've just been ambushed by a federal money grab that this nation hasn't witnessed in recent history, the equivalent of a national sales tax-branded under another name. This version's a giant revenue raiser that deficit-ridden Washington is likely to get hooked on. In fact, it's looking more and more like America's answer to Europe's fatal attraction that's been the leading enabler for the region's extremely high levels of government spending: the value-added tax-the VAT."

"As I'm sure you've guessed by now, we're talking about the Trump tariffs. And you can forget about foreigners picking up the tab for the tariffs. It's Americans who will. According to a wide range of forecasts, this new nationwide sales levy will yank back from consumers' wallets about half the projected tax savings from the One Big Beautiful Bill's extension of the 2017 Trump tax cuts. Unmasking the Trump tariffs as a national sales tax helps clarify the burden looming for Americans' finances going forward."

"Almost all countries except the U.S. impose national sales taxes on all or most goods sold anywhere within their borders, either at a flat rate or at varying percentages depending on the product. These taxes come in two forms: A few nations, including Pakistan and Myanmar, deploy a simple countrywide tax similar to America's state sales taxes. But the most common type by far is the value-added system imposed in stages at each level of production. It's a bedrock of the regimes in France, Germany, and virtually every other EU country. The VAT is a formidable revenue generator that has fueled government spending in Europe and imposed a huge drag on Europe's growth."

Trump-era tariffs operate like a nationwide sales levy that will be paid by American consumers rather than foreign producers. Forecasts show the tariffs will recover roughly half of the projected savings from extending the 2017 tax cuts. The tariff mechanism mirrors a value-added tax collected at multiple production stages and is a powerful revenue source. European VAT regimes have enabled very high government spending and weighed on growth. The United States has not historically adopted a VAT or comparable national sales tax, making the tariffs an unusual potential long-term revenue tool.

Read at Fortune