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the same time any exports from the European Common Market
countries to foreign sources
to foreign outlets would
be rebated the equivalent of the border tax.
We were told at one point in Germany that it is
expected that the border tax rate will be in the range of
14 to 15 percent.
Now, we need a great deal of study to determine
the extent to which a border tax rate of 14 to 15 percent
would have an impact on trade.
The problem is presented very largely because
of the difference in taxation systems in Europe and the
United States. In Europe, they raise a great deal of their
revenues by indirect taxes. In the United States we have
very few indirect taxes.
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It is the indirect taxes that form the structure
that becomes the border taxes. Since we have very few
of them we are not in a position to impose a border tax.
I can't judge at this time what the findings of the
studies will be as to the trade impact of the European
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border taxes, nor can I indicate in any way what our alter-
natives are as to how to deal with the situation if we
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find these taxes are materially restricting our trade.
We could conceivably be forced, despite the policy
statement I made, to impose some kind of taxation system
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in order to equalize.
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