What exactly is the tax called? The actual term is something like
“distance-adjusted tax”.
This is a subject on which I'm going to admit to being completely confused. You've heard the old joke about how you'd like to meet a one-handed economist, because an economist will say “on the one hand” and then “on the other”. I can't get two economists to agree as to how this would work, whether it is a replacement for the VAT or it's completely different, whether the WTO will rule on this or not.
What I can say is that it is primarily designed as a revenue enhancement measure in Washington. They have huge increases to defence spending and cuts in other areas that don't equate to the increases they're making in defence, so they would have to enhance revenue. It's questionable as to whether or not revenue enhancement measures would work. You'll see the U.S. exchange rate change and any revenue gains would be short term. Whether or not you can get people to repatriate profits from abroad under this is another question. However, we didn't see this show up in the administration submission for tax policy, so that's a sign that they may be backing away from this.
Again, I'll admit to being completely and totally confused by the distance-adjusted tax and I can't get two economists to sit in the same room and debate. You guys should actually have four economists here, with two on each side, and spend an hour watching them yell and scream at each other about this. Then you can try to come up with your own conclusions.