Can Fair Systems Distort Outcomes? USA versus Europe’s VAT
US policymakers regularly criticize Europe’s Value-Added Tax (VAT) refund system, arguing it tilts trade dynamics in favor of European producers. European counterparts counter with a World Trade Organization (WTO) ruling that deems VAT refunds for exporters non-subsidies, suggesting compliance with global trade norms. Yet, does technical legality equate to equitable outcomes? Can the system lead to undesirable effects?