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Implementing the Border Adjustment Tax: Winners & Losers

Implementing the Border Adjustment Tax: Winners & Losers

The border adjustment tax will harm certain companies and aid others.  To be expected, exporters like the proposal and importers hate it.  Philip R. Hirschfeld and Kenneth Lobo look at the industries that will be winners and those that will be losers if the border adjustment tax is adopted.  Strangely, each side argues that employment will be increased if its position is adopted, an example of how voodoo economics support a politicized tax proposal.

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European State Aid: The Makings of A Global Trade War

European State Aid: The Makings of A Global Trade War

This month, we reminisce on the best of 2016, with articles on the brewing transatlantic trade war disguised as European Commission attacks on illegal State Aid given to U.S.-based groups.

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European State Aid and W.T.O. Subsidies

Recent European Commission rulings have attacked tax rulings granted by Ireland and the Netherlands to Apple and Starbucks, respectively.  These rulings are not meaningfully different from those granted for decades by various E.U. Member States.  To the shock of these countries, the tax rulings distorted trade.  At the same time, the World Trade Organization (“W.T.O.”) determined that several E.U. Member States have granted actionable subsidies to Airbus in order to assist the company in a way that distorts trade among W.T.O. members.  Fanny Karaman, Stanley C. Ruchelman, and Astrid Champion explain (i) the basic internal procedures within the E.U. that outlaw State Aid and (ii) the applicable provisions of the global trade agreement embodied in the W.T.O. in connection with actionable subsidies.  In light of the W.T.O. ruling, the question to be answered is whether the E.U. is being disingenuous by not recovering the European subsidies given to Airbus.

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